0000052827-22-000018 | 10-K | XBRL Viewer

Net income attributable to noncontrolling interests in the operating partnership

67,678

59,105

8,573

Dividends ($1.08 per share)

(140,040)

Issuance of shares under incentive stock plans, (in shares)

298,003

Issuance of shares under incentive stock plans

1,260

$ 1,260

Stock-based compensation

6,904

$ 6,904

Repurchase of common shares, (in shares)

(455,609)

Repurchase of common shares

(12,680)

$ (4,250)

(8,430)

Actuarial change and amortization of pension and postretirement plan liabilities

(1,350)

Foreign currency translation adjustment

963

784

179

Cash flow hedges

(30,482)

(30,875)

393

Distributions to noncontrolling interests in consolidated affiliates

(9,161)

Ending balance (in shares) at Dec. 31, 2019

129,331,069

Ending balance at Dec. 31, 2019

1,537,642

$ 888,177

583,006

(31,202)

97,661

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Cumulative-effect adjustment due to adoption of ASU No. 2018-02

1,537,642

$ 888,177

583,006

(31,202)

97,661

Issuances of shares associated with the merger with Pope Resources (in shares)

7,181,071

Issuances of shares associated with the merger with Pope Resources

172,418

$ 172,418

Net income attributable to noncontrolling interests in the operating partnership

29,784

37,612

(7,828)

(528)

Dividends ($1.08 per share)

(146,278)

Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $799 (in shares)

1,103,012

Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $799

32,574

$ 32,574

Issuance of shares under incentive stock plans, (in shares)

266,036

Issuance of shares under incentive stock plans

1,589

$ 1,589

Stock-based compensation

8,026

$ 8,026

Repurchase of common shares, (in shares)

(219,619)

Repurchase of common shares

(4,757)

$ (1,605)

(3,152)

Acquisition of noncontrolling interests in consolidated affiliates

333,366

Adjustment of noncontrolling interests in the operating partnership

(24,393)

Conversion of units into common shares (in shares)

17,253

Conversion of units into common shares

496

$ 496

Actuarial change and amortization of pension and postretirement plan liabilities

(925)

Foreign currency translation adjustment

28,272

22,928

5,344

Cash flow hedges

(61,055)

(62,146)

1,091

Allocation of other comprehensive income to noncontrolling interests in the operating partnership

(2,540)

Distributions to noncontrolling interests in consolidated affiliates

(12,643)

Noncontrolling interests in consolidated affiliates redemption of shares

(28,403)

Ending balance (in shares) at Dec. 31, 2020

137,678,822

Ending balance at Dec. 31, 2020

1,862,645

$ 1,101,675

446,267

(73,885)

388,588

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Cumulative-effect adjustment due to adoption of ASU No. 2018-02

1,862,645

$ 1,101,675

446,267

(73,885)

388,588

Net income attributable to noncontrolling interests in the operating partnership

210,487

157,066

53,421

(4,516)

Dividends ($1.08 per share)

^[1]

(153,980)

Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $799 (in shares)

6,357,972

Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $799

233,033

$ 233,033

Issuance of shares under incentive stock plans, (in shares)

270,713

Issuance of shares under incentive stock plans

6,029

$ 6,029

Stock-based compensation

9,277

$ 9,277

Repurchase of common shares, (in shares)

(47,705)

Repurchase of common shares

(1,617)

$ (1,617)

Fund II Carried Interest Incentive Fee

(3,807)

Disposition of noncontrolling interests in consolidated affiliates

(255,486)

Measurement period adjustment of noncontrolling interests in consolidated affiliates

9,690

Adjustment of noncontrolling interests in the operating partnership

(42,530)

Conversion of units into common shares (in shares)

1,113,159

Conversion of units into common shares

40,676

$ 40,676

Actuarial change and amortization of pension and postretirement plan liabilities

12,476

Foreign currency translation adjustment

(22,096)

(18,487)

(3,609)

Cash flow hedges

60,315

61,893

(1,578)

Allocation of other comprehensive income to noncontrolling interests in the operating partnership

(1,601)

Distributions to noncontrolling interests in consolidated affiliates

(115,298)

Noncontrolling interests in consolidated affiliates redemption of shares

(28,119)

Ending balance (in shares) at Dec. 31, 2021

145,372,961

Ending balance at Dec. 31, 2021

1,815,578

$ 1,389,073

402,307

(19,604)

43,802

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Cumulative-effect adjustment due to adoption of ASU No. 2018-02

$ 1,815,578

$ 1,389,073

$ 402,307

$ (19,604)

$ 43,802

[1]	For information regarding distributions to noncontrolling interests in the operating partnership, see the Rayonier Inc. Consolidated Statements of Cash Flows and Note 7 — Noncontrolling Interests.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Stockholders' Equity [Abstract]
Dividends (dollars per share)	$ 1.08	$ 1.08	$ 1.08
Offering issuance costs	$ 2,500	$ 799

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	$ 1,862,645	$ 1,537,642	$ 1,654,550
Issuance of units associated with the merger with Pope Resources		172,418
Net income (loss)	210,487	29,784	67,678
Distributions on units	(158,249)	(149,875)	(140,040)
Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $2.5 million	233,033	32,574
Issuance of units under incentive stock plans	6,029	1,589	1,260
Stock-based compensation	9,277	8,026	6,904
Repurchase of units	(1,617)	(4,757)	(12,680)
Adjustment of Redeemable Operating Partnership Units	(44,378)	(23,864)
Acquisition of noncontrolling interests in consolidated affiliates		333,366
Conversion of units to common shares	40,676	496
Fund II Carried Interest Incentive Fee	(3,807)
Measurement period adjustment of noncontrolling interests in consolidated affiliates	9,690
Disposition of noncontrolling interests in consolidated affiliates	(255,486)
Actuarial change and amortization of pension and postretirement plan liabilities	12,476	(925)	(1,350)
Foreign currency translation adjustment	(22,096)	28,272	963
Cash flow hedges	60,315	(61,055)	(30,482)
Distributions to noncontrolling interests in consolidated affiliates	(115,298)	(12,643)	(9,161)
Noncontrolling interests in consolidated affiliates redemption of unit equivalents	(28,119)	(28,403)
Ending balance	1,815,578	1,862,645	1,537,642
Accumulated Other Comprehensive Income (Loss)
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	(71,345)	(31,202)	239
Actuarial change and amortization of pension and postretirement plan liabilities	12,476	(925)	(1,350)
Foreign currency translation adjustment	(18,487)	22,928	784
Cash flow hedges	61,893	(62,146)	(30,875)
Ending balance	(15,463)	(71,345)	(31,202)
Noncontrolling Interests in Consolidated Affiliates
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	388,588	97,661	97,677
Net income (loss)	53,421	(7,828)	8,573
Acquisition of noncontrolling interests in consolidated affiliates		333,366
Fund II Carried Interest Incentive Fee	(3,807)
Measurement period adjustment of noncontrolling interests in consolidated affiliates	9,690
Disposition of noncontrolling interests in consolidated affiliates	(255,486)
Foreign currency translation adjustment	(3,609)	5,344	179
Cash flow hedges	(1,578)	1,091	393
Distributions to noncontrolling interests in consolidated affiliates	(115,298)	(12,643)	(9,161)
Noncontrolling interests in consolidated affiliates redemption of unit equivalents	(28,119)	(28,403)
Ending balance	43,802	388,588	97,661
General Partners’ Capital \| Units
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	15,454	14,712	15,566
Issuance of units associated with the merger with Pope Resources		1,724
Net income (loss)	1,571	376	591
Distributions on units	(1,583)	(1,500)	(1,400)
Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $2.5 million	2,330	326
Issuance of units under incentive stock plans	60	16	13
Stock-based compensation	93	81	69
Repurchase of units	(16)	(47)	(127)
Adjustment of Redeemable Operating Partnership Units	(444)	(239)
Conversion of units to common shares	407	5
Ending balance	17,872	15,454	14,712
Limited Partners’ Capital \| Units
Increase (Decrease) in Partners' Capital [Roll Forward]
Beginning balance	1,529,948	1,456,471	1,541,068
Issuance of units associated with the merger with Pope Resources		170,694
Net income (loss)	155,495	37,236	58,514
Distributions on units	(156,666)	(148,375)	(138,640)
Issuance of shares under the “at-the-market” equity offering, net of commissions and offering costs of $2.5 million	230,703	32,248
Issuance of units under incentive stock plans	5,969	1,573	1,247
Stock-based compensation	9,184	7,945	6,835
Repurchase of units	(1,601)	(4,710)	(12,553)
Adjustment of Redeemable Operating Partnership Units	(43,934)	(23,625)
Conversion of units to common shares	40,269	491
Ending balance	$ 1,769,367	$ 1,529,948	$ 1,456,471

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Distributions declared (in dollars per unit)	$ 1.08	$ 1.08	$ 1.08
Offering issuance costs	$ 2,500	$ 799

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

OPERATING ACTIVITIES

Adjustments to reconcile net income to cash provided by operating activities:

$ 210,487

$ 29,784

$ 67,678

Depreciation, depletion and amortization

155,722

164,996

128,235

Non-cash cost of land and improved development

24,976

30,368

12,565

Stock-based incentive compensation expense

9,277

8,026

6,904

Deferred income taxes

8,509

7,541

11,314

Amortization of losses from pension and postretirement plans

1,174

869

449

Timber write-offs due to casualty events

15,203

Fund II carried interest incentive fee

(3,807)

Other

9,456

(11,100)

(4,999)

Changes in operating assets and liabilities, net of effects of merger with Pope Resources:

Receivables

17,239

(15,378)

(849)

Inventories

(503)

(1,448)

1,224

Accounts payable

(1,593)

5,668

(1,554)

All other operating activities

(5,846)

(1,700)

(6,714)

CASH PROVIDED BY OPERATING ACTIVITIES

325,110

204,174

214,253

Real estate development investments

Capital expenditures

(75,965)

(66,500)

(63,996)

(12,521)

(6,462)

(6,803)

Purchase of timberlands

(179,115)

(24,695)

(142,287)

Cash consideration for merger with Pope Resources, net of cash acquired

(231,068)

Other

912

(584)

(6,304)

CASH USED FOR INVESTING ACTIVITIES

(26,253)

(213,643)

(219,390)

FINANCING ACTIVITIES

Issuance of debt

446,378

320,000

82,000

Repayment of debt

(420,000)

(152,000)

Distributions on units

(157,784)

(149,944)

(141,071)

Dividends paid on common stock

(153,515)

(146,348)

(141,071)

Distributions to noncontrolling interests in the operating partnership

(4,269)

(3,596)

Proceeds from the issuance of common shares under incentive stock plan

5,922

1,368

1,260

Proceeds from the issuance of units under incentive stock plan

5,922

1,368

1,260

Proceeds from the issuance of common shares under the “at-the-market” (ATM) equity offering program, net of commissions and offering costs

230,826

32,574

Repurchase of units to pay withholding taxes on vested incentive stock awards

(1,617)

(1,605)

(4,250)

Repurchase of common shares to pay withholding taxes on vested incentive stock awards

(1,617)

(1,605)

(4,250)

Repurchase of common shares made under repurchase program

(3,152)

(8,430)

Debt issuance cost

(4,846)

(2,483)

(132)

Proceeds from shareholder distribution hedge

135

Noncontrolling interests in consolidated affiliates redemption of shares

(5,113)

Distributions to noncontrolling interests in consolidated affiliates

(108,956)

(12,643)

(9,161)

Make-whole fee on NWFCS debt prepayment

(6,234)

CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES

(16,311)

27,002

(79,649)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(889)

(19)

(1,700)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Change in cash, cash equivalents and restricted cash

281,657

17,514

(86,486)

Balance, beginning of year

87,482

69,968

156,454

Balance, end of year

369,139

87,482

69,968

Cash paid during the year:

Interest

^[1]

42,672

40,895

32,782

Income taxes

7,392

816

1,691

Non-cash investing activity:

Capital assets purchased on account

5,272

3,205

3,568

Non-cash financing activity:

Equity consideration for merger with Pope Resources

172,640

Unit consideration for merger with Pope Resources

172,640

Redeemable Operating Partnership Unit consideration for merger with Pope Resources

106,752

Noncontrolling interests in consolidated affiliates redemption of shares

^[2]

28,119

23,290

Large Disposition Of Timberlands

Adjustments to reconcile net income to cash provided by operating activities:

Gain on sale of large disposition of timberlands

(44,784)

(28,655)

Net proceeds from large disposition of timberlands

54,682

115,666

Timber Funds III And IV

Adjustments to reconcile net income to cash provided by operating activities:

Gain on sale of large disposition of timberlands

(3,675)

Net proceeds from large disposition of timberlands

31,014

Fund II Timberland Dispositions

Adjustments to reconcile net income to cash provided by operating activities:

Gain on sale of large disposition of timberlands

(51,522)

Net proceeds from large disposition of timberlands

$ 154,740

$ 0

[1]

Interest paid is presented net of patronage payments received of $6.8 million, $4.7 million and $4.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. For additional information on patronage payments, see Note 10 — Debt.

[2]

In 2021, the New Zealand subsidiary made a capital distribution in order to redeem certain equity interests, resulting in the recording of a loan payable by the New Zealand subsidiary in the amount of $28.1 million. In 2020, the New Zealand subsidiary made a capital distribution in order to redeem certain equity interests, resulting in the recording of a noncontrolling interest share redemption of $5.1 million and a loan payable by the New Zealand subsidiary in the amount of $23.3 million. See Note 7 - Noncontrolling Interests and Note 10 - Debt for further information.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

Patronage refunds received, netted with interest paid

$ 6,800

$ 4,700

$ 4,000

Noncontrolling interests in consolidated affiliates redemption of shares

^[1]

28,119

23,290

$ 0

Matariki Forestry Group | New Zealand subsidiary noncontrolling interest shareholder loan due 2026 at a fixed interest rate of 3.64% | Excluding Timber Funds

Noncontrolling interests in consolidated affiliates redemption of shares

$ 28,100

23,300

Interest share redemption

$ 5,100

[1]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Rayonier Inc.'s Consolidated Financial Statements include the Operating Partnership, wholly-owned subsidiaries and entities in which the Company has a controlling interest. Rayonier, L.P.'s Consolidated Financial Statements include wholly-owned subsidiaries and entities in which the Operating Partnership has a controlling interest. For additional information regarding our consolidated entities with a noncontrolling interest component, see Note 7 - Noncontrolling Interests. All intercompany balances and transactions are eliminated.

As of December 31, 2021, the Company owned a 97.8% interest in the Operating Partnership, with the remaining 2.2% interest owned by limited partners of the Operating Partnership. As the sole general partner of the Operating Partnership, Rayonier Inc. has exclusive control of the day-to-day management of the Operating Partnership.

DISPOSITION OF TIMBER FUNDS

Upon completion of the Pope Resources merger in May 2020, we became the manager of three private equity timber funds, Fund II, Fund III, and Fund IV, consisting of 141,000 acres in the Pacific Northwest, and obtained ownership interests in the Funds of 20%, 5%, and 15%, respectively.

On July 21, 2021, we sold the rights to manage Fund III and IV, as well as our ownership interests in both funds to BTG Pactual’s Timberland Investment Group (TIG) for an aggregate sales price of $35.9 million. Due to the sale of our rights to manage Fund III and Fund IV, we determined that we no longer have the power to direct the activities that most significantly impact the success of Fund III and Fund IV. As a result, Timber Fund III and IV balance sheets and results of operations are only included in our consolidated financial statements through the date of the sale. For additional information on Fund III and IV, see Note 7 - Noncontrolling Interests.

In addition, we completed the liquidation of Fund II timberland assets through three separate transactions during the third and fourth quarters of 2021 for an aggregate sales price of $156.8 million. As of December 31, 2021, we continue to manage and maintain a 20% ownership interest in Fund II, which is scheduled to terminate in March 2023. Prior to the termination of Fund II, the remaining capital will be distributed to Fund II investors. For additional information regarding Fund II, see Note 7 - Noncontrolling Interests, Note 8 - Variable Interest Entities and Note 24 - Restricted Cash.

RECLASSIFICATIONS

Effective for year ended December 31, 2021, we have updated our presentation for the employee benefit pension plan to include a separate line item “Expenses paid,” which was previously reported as part of “Actuarial loss (gain).” “Actuarial loss (gain)” now solely represents changes resulting from adjustments to actuarial assumptions and estimates. The other categories of the pension plan remain unchanged, and this reclassification had no impact on the total projected benefit obligation. See Note 20 - Employee Benefit Plans.

USE OF ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP 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 consist of cash on hand and other highly liquid investments with original maturities of three months or less.

ACCOUNTS RECEIVABLE

Accounts receivable are primarily amounts due to us for the sale of timber and are presented net of an allowance for doubtful accounts.

INVENTORY

Higher and better use (“HBU”) real estate properties that are expected to be sold within one year are included in inventory at the lower of cost or net realizable value. HBU properties that are expected to be sold after one year are included in a separate balance sheet line entitled “Higher and Better Use Timberlands and Real Estate Development Investments.” See below for additional information.

Inventory also includes logs available to be sold by the Trading segment. Log inventory is recorded at the lower of cost or net realizable value and expensed to cost of sales when sold to third-party buyers. See Note 18 — Inventory for additional information.

PREPAID LOGGING ROADS

Costs for roads built in the Pacific Northwest and New Zealand to access particular tracts to be harvested in the upcoming 24 months to 60 months are recorded as prepaid logging roads. We charge such costs to expense as timber is harvested using an amortization rate determined annually as the total cost of prepaid roads divided by the estimated tons of timber to be accessed by those roads. The prepaid balance is classified as short-term or long-term based on the upcoming harvest schedule. See Note 25 — Other Assets for additional information.

PATRONAGE DIVIDENDS

As a requirement of the Farm Credit Act, borrowers in the Farm Credit System are required to purchase equity in Farm Credit lenders. The equity balance primarily represents shares of Class A common stock in CoBank valued at $100 par value. CoBank equity purchases continue annually until a balance equal to 8% of our 10-year historical average loan balance at CoBank is obtained. Initially, a minimal equity purchase was made in cash upon receiving the loan proceeds. Subsequently, equity purchases are made annually through patronage dividends, of which approximately 88% is cash and 12% is equity. The stock has no cash value until retired. As our loans are paid in full, the stock is generally retired over a 10-year loan base period beginning in the year following loan payoff.

Estimated cash and equity dividends are recognized as an offset to interest expense in the period earned. These estimates are calculated by applying the weighted average debt balance with each participating lender to a historical dividend rate. Changes in assumptions, as well as changes in actual experience, could cause the estimates to change. See Note 10 — Debt and Note 25 — Other Assets for additional information.

DEFERRED FINANCING COSTS

Deferred financing costs related to revolving debt are capitalized and amortized to interest expense over the term of the revolving debt using a method that approximates the effective interest method. See Note 25 — Other Assets for additional information on deferred financing costs related to revolving debt. See Note 10 — Debt for additional information on deferred financing costs related to term debt.

CAPITALIZED SOFTWARE COSTS

Software costs are capitalized and amortized over a period not exceeding five years using the straight-line method.

TIMBER AND TIMBERLANDS

Timber is stated at the lower of cost or net realizable value. Costs relating to acquiring, planting and growing timber including real estate taxes, site preparation and direct support costs relating to facilities, vehicles and supplies, are capitalized. A portion of timberland lease payments are capitalized based on the proportion of acres with merchantable timber volume remaining to be harvested under the lease term and the residual portion of the lease payments are expensed as incurred. Payroll costs are capitalized for time spent on timber growing activities, while interest or any other intangible costs are not capitalized. An annual depletion rate is established for each particular region by dividing merchantable inventory cost by standing merchantable inventory volume, which is estimated annually. We charge accumulated costs attributed to merchantable timber to depletion expense (cost of sales) at the time the timber is harvested or when the underlying timberland is sold.

Upon the acquisition of timberland, we make 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 the 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.

HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS

HBU timberland is recorded at the lower of cost or net realizable value. These properties are managed as timberlands until sold or developed, with sales and depletion expense related to the harvesting of timber accounted for within the respective timber segment. At the time of sale, the cost basis of any unharvested timber is recorded as depletion expense, a component of cost of sales, within the Real Estate segment.

HBU timberland and real estate development investments expected to be sold within twelve months are recorded as inventory. See Note 17 — Higher and Better Use Timberlands and Real Estate Development Investments for additional information.

REAL ESTATE DEVELOPMENT INVESTMENTS

Real estate development investments include capitalized costs for targeted infrastructure improvements, such as roadways and utilities. The capitalization period relating to real estate development investments is the period in which activities necessary to ready a property for its intended use are in progress. The period begins when such activities commence, typically when we begin the site work for land already owned, and ends when the improvement is substantially complete and ready for its intended use. Determination of when construction of a project is substantially complete and ready for its intended use is subjective and requires business judgement. As such, we determine when the capitalization period begins and ends through communication with project and other managers responsible for the tracking and oversight of individual projects.

We capitalize costs directly associated with development and construction of identified real estate projects, such as infrastructure, roadways, utilities, amenities and/or other improvements designed to enhance marketability and create parcels, pads and/or lots for sale. We capitalize interest based on the amount of underlying expenditures on real estate projects under development.

IMPAIRMENT OF HBU TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS

We review our higher and better use timberlands and real estate development investments for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Impairment indicators for each development project are assessed separately and include, but are not limited to, significant decreases in sales pace or average selling prices, significant increases in expected land development and construction costs, and projected losses on expected future sales. Development projects have extended life cycles that may last 20 to 40 years, or longer, and have few long-term contractual cash flows. Development periods often occur through several economic cycles. Subjective factors such as the expected timing of property development and sales, optimal development density and sales strategy impact the timing and amount of expected future cash flows and fair value.

An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair value. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future economic conditions, such as construction costs and sales values that could differ materially from actual results in future periods. If impairment indicators exist and it is expected that undiscounted cash flows generated by the asset are less than its carrying amount less costs to sell, an impairment provision is recorded to write-down the carrying amount of the asset to its fair value.

PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION

Property, plant and equipment additions are recorded at cost, including applicable freight, interest, construction and installation costs. We generally depreciate our assets, including office and transportation equipment, using the straight-line depreciation method over 3 to 25 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 sale or retirement of assets are included in operating income. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate 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 the amount 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.

LEASES

At inception, we determine if an arrangement is a lease and whether that lease meets the classification criteria of a finance or operating lease. Operating leases are included in right-of-use (“ROU”) assets, other current liabilities, and long-term lease liability in the Consolidated Balance Sheets. The income generated from our commercial and residential leases in Port Gamble are accounted for in accordance with Topic 842. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

RIGHT-OF-USE ASSETS IMPAIRMENT

Operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group to which the operating lease is assigned may not be recoverable. Recoverability of the asset group is evaluated based on forecasted undiscounted cash flows. If the carrying amount of the asset group is not recoverable, the fair value of the asset group is compared to its carrying amount and an impairment charge is recognized for the amount by which the carrying amount exceeds the fair value. A discounted cash flow approach using market participant assumptions of the expected cash flows and discount rate are used to estimate the fair value of the asset group.

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.

ENVIRONMENTAL REMEDIATION LIABILITIES

Environmental remediation liabilities have been evaluated using a combination of methods. The liability is estimated based on amounts included in construction contracts and estimates for construction contingencies, project management, and other professional fees. See Note 15 - Environmental and Natural Resource Damages Liabilities for more information.

GOODWILL

Goodwill represents the excess of the acquisition cost of the New Zealand Timber segment over the fair value of the net assets acquired. Goodwill is not amortized, but is periodically reviewed for impairment. An impairment test for this reporting unit’s goodwill is performed annually and whenever events or circumstances indicate that the value of goodwill may be impaired. We compare the fair value of the New Zealand Timber segment, using an independent valuation for the New Zealand forest assets, to its carrying value including goodwill. The independent valuation of the New Zealand forest assets is based on discounted cash flow models where the fair value is calculated using cash flows from sustainable forest management plans. The fair value of the forest assets is measured as the present value of cash flows from one growth cycle based on the productive forest land, taking into consideration environmental, operational, and market restrictions. These cash flow valuations involve a number of estimates that require broad assumptions and significant judgment regarding future performance. The annual impairment test was performed as of October 1, 2021; the estimated fair value of the New Zealand Timber segment exceeded its carrying value and no impairment was recorded. Except for changes in the New Zealand foreign exchange rate, there have been no adjustments to the carrying value of goodwill since the initial recognition. See Note 25 — Other Assets for additional information.

FOREIGN CURRENCY TRANSLATION AND REMEASUREMENT

The functional currency of our New Zealand-based operations 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. Translation gains and losses are recorded as a separate component of Accumulated Other Comprehensive Income (“AOCI”), within Shareholders’ Equity.

U.S. denominated transactions of the New Zealand subsidiary are remeasured into New Zealand dollars at the exchange rate in effect on the date of the transaction and recognized in earnings, net of related cash flow hedges. All income statement items of the New Zealand subsidiary are translated into U.S. dollars for reporting purposes using monthly average exchange rates with translation gains and losses being recorded as a separate component of AOCI, within Shareholders’ Equity.

REDEEMABLE OPERATING PARTNERSHIP UNITS

Limited partners holding Redeemable Operating Partnership Units have the right to put any and all of the units to the Operating Partnership in exchange for Rayonier registered common shares, on a one-for-one basis, or cash, at Rayonier’s option. Consequently, these Redeemable Operating Partnership Units are classified outside of permanent partners’ capital in the Operating Partnership's accompanying balance sheets and the related

noncontrolling interest is classified outside of permanent equity in the accompanying balance sheets of Rayonier. The recorded value of the Redeemable Operating Partnership Units is based on the higher of 1) initial carrying amount, increased or decreased for its share of net income or loss, other comprehensive income or loss, and dividend or 2) redemption value as measured by the closing price of Rayonier common stock on the balance sheet date multiplied by the total number of Redeemable Operating Partnership Units outstanding.

RELATED PARTY

We follow ASC 850, Related Party Disclosure, for the identification of related parties and disclosure of related party transactions. A party is considered to be related to us if the party, directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include principal owners, management and directors, as well as members of their immediate families or any other parties with which we may deal if one party to a transaction controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. See Note 28 – Related Party.

BUSINESS COMBINATION

We account for business combinations using the acquisition method of accounting, under which all assets acquired and liabilities assumed, including amounts attributable to noncontrolling interest, are recorded at their respective fair values as of the acquisition date. The excess of the purchase price over the fair value of identifiable assets and liabilities is recorded as goodwill. The allocation of purchase price in a business combination uses significant assumptions and estimates. Critical estimates include, but are not limited to, future expected cash flows, including revenues and expenses, and applicable discount rates. While we believe our estimates and assumptions to be reasonable, they are subject to change as we obtain additional information related to those estimates during the applicable measurement periods (up to one year from the acquisition date).

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, we are required to record preliminary values in the financial statements for the items for which the accounting is incomplete. Adjustments to the preliminary recorded values, which are identified during the measurement period, are recognized in the reporting period in which the adjustments are determined. This includes any effect on earnings of changes in depletion, depreciation or amortization, or other income effects as a result of the change to the recorded values, calculated as if the accounting had been completed at the acquisition date. During the measurement period, we are also required to recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends the sooner of one year from the acquisition date or when we receive the information we were seeking about facts and circumstances that existed as of the acquisition date or learn that more information is not obtainable. In 2021, we finalized the purchase price allocation related to the Pope Resources merger. See Note 2 – Merger with Pope Resources for more information.

REVENUE RECOGNITION

We recognize revenues when control of promised goods or services (“performance obligations”) is transferred to customers, in an amount that reflects the consideration expected in exchange for those goods or services (“transaction price”). We generally satisfy performance obligations within a year of entering into a contract and therefore have applied the disclosure exemption found under ASC 606-10-50-14. Unsatisfied performance obligations as of December 31, 2021 are primarily due to advances on stumpage contracts, unearned license revenue and post-closing obligations on real estate sales. These performance obligations are expected to be satisfied within the next twelve months. We generally collect payment within a year of satisfying performance obligations and therefore have elected not to adjust revenues for a financing component.

TIMBER SALES

Revenue from the sale of timber is recognized when control passes to the buyer. We utilize two primary methods or sales channels for the sale of timber – a stumpage/standing timber model and a delivered log model. The sales method we employ depends upon local market conditions and which method management believes will provide the best overall margins.

Under the stumpage model, standing timber is sold primarily under pay-as-cut contracts, with a specified duration (typically one year or less) and fixed prices, whereby revenue is recognized as timber is severed and the sales volume is determined. We also sell stumpage under lump-sum contracts for specified parcels where we receive cash for the full agreed value of the timber prior to harvest and control passes to the buyer upon signing the contract. We retain interest in the land, slash products and the use of the land for recreational and other purposes. Any uncut timber remaining at the end of the contract period reverts to us. Revenue is recognized for lump-sum timber sales when payment is received, the contract is signed and control passes to the buyer. A third type of stumpage sale we utilize is an agreed-volume sale, whereby revenue is recognized using the output method, as periodic physical observations are made of the percentage of acreage harvested.

Under the delivered log model, we hire third-party loggers and haulers to harvest timber and deliver it to a buyer. Sales of domestic logs generally do not require an initial payment and are made to third-party customers on open credit terms. Sales of export logs generally require a letter of credit from an approved bank. Revenue is recognized when the logs are delivered and control has passed to the buyer. For domestic log sales, control is considered passed to the buyer as the logs are delivered to the customer’s facility. For export log sales (primarily in New Zealand), control is considered passed to the buyer upon delivery onto the export vessel.

The following table summarizes revenue recognition and general payment terms for timber sales:

Contract Type

Performance
Obligation

Timing of
Revenue Recognition

General
Payment Terms

Stumpage Pay-as-Cut

Right to harvest a unit (i.e. ton, MBF, JAS m3) of standing timber

As timber is severed
(point-in-time)

Initial payment between

5% and 20% of estimated contract value; collection generally within 10 days of severance

Stumpage Lump Sum

Right to harvest an agreed upon acreage of standing timber

Contract execution
(point-in-time)

Full payment due upon contract execution

Stumpage Agreed Volume

Right to harvest an agreed upon volume of standing timber

As timber is severed
(over-time)

Payments made throughout contract term at the earlier of a specified harvest percentage or time elapsed

Delivered Wood (Domestic)

Delivery of a unit (i.e. ton, MBF, JAS m3) of timber to customer’s facility

Upon delivery to customer’s facility
(point-in-time)

No initial payment and on open credit terms; collection generally within 30 days of invoice

Delivered Wood (Export)

Delivery of a unit (i.e. ton, MBF, JAS m3) onto export vessel

Upon delivery onto export vessel
(point-in-time)

Letter of credit from an approved bank; collection generally within 30 days of delivery

NON-TIMBER SALES

Non-timber sales are primarily comprised of hunting and recreational licenses, carbon credits and other auxiliary income. Hunting and recreational license sales and any related costs are recognized ratably over the term of the agreement and included in “Sales” and “Cost of sales,” respectively. Payment is generally due upon contract execution. The New Zealand Emissions Trading Scheme (“NZ ETS”) incentivizes the lowering of greenhouse gas emissions by providing carbon credits to certain organizations that lower carbon emissions. Our New Zealand segment regularly sells carbon credits and recognizes income as they are sold to other carbon emitting entities.

LOG TRADING

Log trading revenue is generally recognized when procured logs are delivered to the buyer and control has passed. For domestic log trading, control is considered passed to the buyer as the logs are delivered to the customer’s facility. For export log trading, control is considered passed to the buyer upon delivery onto the export vessel. The Trading segment also includes sales from log agency contracts, whereby we act as an agent managing export services on behalf of third parties. Revenue for log agency fees are recognized net of related costs.

REAL ESTATE

We recognize revenue on sales of real estate generally at the point in time when cash has been received, the sale has closed and control has passed to the buyer. A deposit of 2% to 5% is generally required at the time a purchase and sale agreement is executed, with the balance due at closing. On sales of development real estate containing future performance obligations, revenue is recognized using the cost input method based on development costs incurred to date relative to the total development costs allocated to the contract with the customer. The aggregate amount of the transaction price allocated to unsatisfied obligations is recorded and presented in “Deferred revenue” in the Consolidated Balance Sheets.

COST OF SALES

Cost of sales associated with timber operations primarily include the cost basis of timber sold (depletion), logging and transportation costs (cut and haul) and ocean freight and demurrage costs (port and freight). Depletion includes the amortization of capitalized costs (site preparation, planting and fertilization, real estate taxes, timberland lease payments and certain payroll costs). Other costs include amortization of capitalized costs related to road and bridge construction and software, depreciation of fixed assets and equipment, road maintenance, severance and excise taxes and fire prevention.

Cost of sales associated with real estate sold includes the cost of the land, the cost of any timber on the property that was conveyed to the buyer, any real estate development costs and any closing costs including sales commissions that may be borne by us. We expense closing costs, including sales commissions, when incurred for all real estate sales with future performance obligations expected to be satisfied within one year.

When developed residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs benefiting the property sold through completion. Costs are allocated to each sold acre or lot based upon the relative sales value of each acre or lot as compared to the estimated sales value of the total project. For purposes of allocating development costs, estimates are reevaluated at least annually and more frequently if warranted by market conditions, changes in the project’s scope or other factors, with any adjustments being allocated prospectively to the remaining units available for sale.

EMPLOYEE BENEFIT PLANS

The determination of expense and funding requirements for our defined benefit pension plan, its unfunded excess pension plan and its postretirement life insurance plan are largely based on a number of actuarial assumptions. The key assumptions include discount rate, return on assets, mortality rates and longevity of employees. See Note 20 — Employee Benefit Plans for assumptions used to determine benefit obligations, and the net periodic benefit cost for the year ended December 31, 2021.

Periodic pension and other postretirement expense is included in “Cost of sales,” “Selling and general expenses” and “Interest and other miscellaneous income, net” in the Consolidated Statements of Income and Comprehensive Income. The service cost component of net periodic benefit cost is included in “Cost of sales” and “Selling and general expenses” while the other components of net periodic benefit cost (interest cost, expected return on plan assets and amortization of losses or gains) are presented outside of income from operations in “Interest and other miscellaneous income, net.” At December 31, 2021 and 2020, our pension plans were in a net liability position (underfunded) of $8.7 million and $21.6 million, respectively. The estimated amount to be paid in the next 12 months is recorded in “Accrued payroll and benefits” on the Consolidated Balance Sheets, with the remainder recorded as a long-term liability in “Pension and Other Postretirement Benefits.” Changes in the funded status of our plans are recorded through other comprehensive (loss) income in the year in which the changes occur. We measure plan assets and benefit obligations as of the fiscal year-end. See Note 20 — Employee Benefit Plans for additional information.

INCOME TAXES

We use the asset and liability method of accounting for income taxes. 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 assets and liabilities and their respective tax bases, operating loss carryforwards 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. We recognize the effect of a change in income tax rates on deferred tax assets and liabilities in the Consolidated Statements of Income and Comprehensive Income in the period that includes the enactment date of the rate change. We record a valuation allowance to reduce the carrying amounts of deferred tax assets if it is more-likely-than-not that such deferred tax assets will not be realized.

In determining the provision for income taxes, we compute 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. Inherent in the effective tax rate is an assessment of the ultimate outcome of current period uncertain tax positions. We adjust our annual effective tax rate as additional information on outcomes or events becomes available. Discrete items such as taxing authority examination findings or legislative changes are recognized in the period in which they occur.

Our 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, we record a tax benefit for an uncertain tax position if it is more-likely-than-not to be realized upon ultimate settlement of the issue. We record a liability for an uncertain tax position that does not meet this criterion. We adjust our liabilities for uncertain 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 become available. See Note 22 — Income Taxes for additional information.

NEW ACCOUNTING PRONOUNCEMENTS

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional guidance to ease the potential burden in accounting due to reference rate reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During Q2 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt–Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging–Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The pronouncement eliminates the requirement that contracts legally permitting settlement in registered shares be classified as temporary equity. As a result, Redeemable Operating Partnership Units may be classified as permanent partners’ capital in the Operating partnership’s accompanying balance sheets and the related noncontrolling interest as permanent equity in the accompanying balance sheets of Rayonier, Inc. However, the corresponding SEC guidance on equity classification

has remained unchanged. We will continue to monitor any developments in this area and will adopt this pronouncement upon agreement in guidance.

SUBSEQUENT EVENTS

On January 3, 2022, we drew $200.0 million on our Revolving Credit Facility. On January 4, 2022, we repaid the $325.0 million Senior Notes due 2022 with $125.0 million of cash and the $200.0 million previously drawn on the Revolving Credit Facility. We then made a $200.0 million draw on our 2021 Incremental Term Loan Facility and simultaneously repaid the outstanding principal on our Revolving Credit Facility. The periodic interest rate on the 2021 Incremental Term Loan agreement is subject to a pricing grid based on our leverage ratio, as defined in the credit agreement. As of February 25, 2022, the periodic interest rate on the the 2021 Incremental Term Loan is LIBOR plus 1.55%. Monthly payments of interest only are due on this loan through maturity. See Note 10 - Debt for additional information.

On February 1, 2022, our $200.0 million notional forward-starting interest rate swap matured into an active interest rate swap. This interest rate swap will fix the cost of the 2021 Incremental Term Loan Facility over its seven-year term. We estimate the effective interest rate on the 2021 Incremental Term Loan Facility to be approximately 1.5% after consideration of interest rate swaps and estimated patronage refunds.

MERGER WITH POPE RESOURCES

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

MERGER WITH POPE RESOURCES

On May 8, 2020, Rayonier Inc. and Rayonier, L.P. acquired Pope Resources and became the general partner of Pope Resources. Pope Resources was a master limited partnership that primarily owned and managed timberlands in the U.S. Pacific Northwest. Pope Resources also managed and co-invested in three private equity timber funds and developed and sold real estate properties.

The total purchase price was as follows:



Cash consideration			$247,318
Equity consideration			172,640
Redeemable Operating Partnership Unit consideration			106,752
Fair value of Pope Resources units held by us (a)			11,211
Total purchase price			$537,921

(a) Based on the closing price of Pope Resources units on the NASDAQ on May 7, 2020.

We recognized approximately $17.2 million of merger-related costs that were expensed during the year ended December 31, 2020. See Note 27 — Charges for Integration and Restructuring for descriptions of the components of merger-related costs. The acquisition of Pope Resources was accounted for as a business combination under ASC 805, Business Combinations, (“ASC 805”). Pursuant to ASC 805, we recorded an allocation of the assets acquired and liabilities assumed in the merger with Pope Resources based on their fair values as of May 8, 2020. We completed our assessment of the fair value of the assets acquired and liabilities assumed within the one-year period from the date of acquisition. We recorded measurement period adjustments due to additional information received primarily related to higher and better use timberlands and real estate development investments, as well as timber and timberlands.

As a result of refinements to the purchase price allocation, higher and better use timberlands increased by approximately $8.2 million. This includes development properties in the town of Port Gamble, Washington, development projects in Gig Harbor, Kingston, and Bremerton, Washington and various other assets. Additionally, refinements to the purchase price allocation resulted in an overall increase of $1.1 million to timber and timberlands, with the valuation of core timberlands decreasing by $15.5 million and Timber Funds timber and timberlands increasing by $16.6 million from the preliminary purchase price allocation reported in Note 2 - Merger with Pope Resources in our 2020 Form 10-K.

As a result of refinements to timberlands preliminarily recorded values, we recognized the following decreases in depletion expense during the year ended December 31, 2021:


	Year ended December 31, 2021
	Pacific Northwest Timber	Timber Funds	Total
Depletion (a)	($182)	($1,202)	($1,384)

Total	($182)	($1,202)	($1,384)

(a)Pacific Northwest Timber includes an immaterial increase in depletion expense related to the year ended December 31, 2020. Timber Funds includes an increase in depletion expense of approximately $0.1 million related to the year ended December 31, 2020.

The fair values of the assets acquired and liabilities assumed were determined using the income, cost or market approaches. The fair value measurements were generally based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in ASC 820, Fair Value Measurement, (“ASC 820”) with the exception of certain long-term debt instruments assumed in the merger that can be valued using observable market inputs and are therefore Level 2 measurements. See Note 12 — Fair Value Measurements for further information on the fair value hierarchy.

The final allocation of purchase price to the identifiable assets acquired and liabilities assumed is as follows:


	Core Timberlands	Timber Funds	Total
Timberland and Real Estate Business
Cash	$7,380	$8,870	$16,250
Accounts receivable	2,459	1,787	4,246
Other current assets	703	260	963
Timber and Timberlands	498,630	449,073	947,703
Higher and Better Use Timberlands and Real Estate Development Investments	34,748	—	34,748
Property, plant and equipment	11,616	—	11,616
Other assets (a)	3,737	2,194	5,931
Total identifiable assets acquired	$559,273	$462,184	$1,021,457

Accounts payable	274	293	567
Current maturities of long-term debt	—	25,084	25,084
Accrued interest	244	275	519
Other current liabilities	9,038	2,080	11,118
Long-term debt	53,502	35,759	89,261
Long-term environmental liabilities	10,748	—	10,748
Other non-current liabilities (b)	2,724	461	3,185
Total liabilities assumed	$76,530	$63,952	$140,482

Net identifiable assets	$482,743	$398,232	$880,975
Less: noncontrolling interests	(3,816)	(339,238)	(343,054)
Total net assets acquired	$478,927	$58,994	$537,921

(a)Other assets includes a $1.9 million intangible asset in connection with the Timberland Investment Management business.

(b)Other non-current liabilities includes a $3.2 million deferred income tax liability resulting from the fair value adjustment to Pope Resources’ assets and liabilities.

Pursuant to ASC 805, unaudited supplemental pro forma results of operations for the years ended December 31, 2020 and 2019, assuming the acquisition had occurred as of January 1, 2019, are presented below (in thousands, except per share and unit amounts):


	2020	2019
Sales	$890,400	$821,500

Net income attributable to Rayonier Inc.	$38,411	$28,640
Basic earnings per share attributable to Rayonier Inc.	$0.28	$0.21
Diluted earnings per share attributable to Rayonier Inc.	$0.28	$0.21

Net income attributable to Rayonier, L.P.	$39,658	$29,574
Basic earnings per unit attributable to Rayonier, L.P.	$0.28	$0.21
Diluted earnings per unit attributable to Rayonier, L.P.	$0.28	$0.21

The unaudited pro forma results include certain pro forma adjustments to net earnings that were directly attributable to the acquisition, assuming the acquisition had occurred on January 1, 2019, including the following:

•additional depletion expense that would have been recognized relating to the basis increase in the acquired Timber and Timberlands;

•adjustment to interest expense to reflect the removal of Pope Resources debt and the additional borrowings we incurred in conjunction with the acquisition; and

•a reduction in expenses for year ended December 31, 2020 of $32.3 million for acquisition-related transaction costs.

Pro forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented, nor is it intended to be a projection of future results.

SEGMENT AND GEOGRAPHICAL INFORMATION

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHICAL INFORMATION

Rayonier operates in six reportable segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Timber Funds, Real Estate, and Trading.

Sales between operating segments are made based on estimated fair market value, and intercompany sales, purchases and profits (losses) are eliminated in consolidation. We evaluate financial performance based on segment operating income (loss) and Adjusted EBITDA. Asset information is not reported by segment, as we do not produce asset information by segment internally.

Operating income as presented in the Consolidated Statements of Income and Comprehensive Income is equal to segment income. Certain income (loss) items in the Consolidated Statements of Income and Comprehensive Income are not allocated to segments. These items, which include interest income (expense), miscellaneous income (expense) and income tax expense, are not considered by management to be part of segment operations and are included under “unallocated interest expense and other.”

Segment information for each of the three years ended December 31 follows:


	Sales by Product Line
	2021	2020	2019
Southern Timber	$204,441	$191,831	$194,111
Pacific Northwest Timber	143,021	120,809	85,414
New Zealand Timber	281,158	202,315	241,861
Timber Funds (a)	199,402	29,557	—
Real Estate
Improved Development	51,713	14,498	5,882
Unimproved Development	37,500	8,426	19,476
Rural	43,088	67,152	47,647
Timberland & Non-Strategic	44	19,255	1,338
Conservation Easements	3,855	3,099	—
Deferred Revenue/Other	(2,380)	888	544
Large Dispositions	56,048	116,027	—
Total Real Estate	189,868	229,345	74,887
Trading	95,364	88,973	115,438
Intersegment eliminations (b)	(3,657)	(3,676)	(155)
Total Sales	$1,109,597	$859,154	$711,556

(a)The years ended December 31, 2021 and December 31, 2020 include $159.1 million and $22.7 million, respectively, of sales attributable to noncontrolling interests in Timber Funds. Included in sales attributable to noncontrolling interests in Timber Funds for the year ended December 31, 2021 is $125.4 million from Fund II Timberland Dispositions attributable to noncontrolling interests in Timber Funds. The year ended December 31, 2021 also includes $31.4 million from Fund II Timberland Dispositions attributable to Rayonier.

(b)Primarily consists of the elimination of timberland investment management fees paid to us by the timber funds which are initially recognized as sales and cost of sales within the Timber Funds segment, as well as log marketing fees paid to our Trading segment from our Southern Timber and Pacific Northwest Timber segments for marketing log export sales.


	Operating Income (Loss)
	2021	2020	2019
Southern Timber (a)	$66,111	$41,247	$57,804
Pacific Northwest Timber	6,827	(9,979)	(12,427)
New Zealand Timber	51,513	29,984	48,035
Timber Funds (b)	63,219	(13,195)	—
Real Estate (c)	112,540	71,951	38,665
Trading	144	(462)	8
Corporate and other (d)	(30,579)	(45,158)	(25,058)
Total Operating Income	269,775	74,388	107,027
Unallocated interest expense and other	(44,627)	(37,595)	(26,409)
Total Income before Income Taxes	$225,148	$36,793	$80,618

(a)The year ended December 31, 2020 includes $6.0 million of timber write-offs resulting from casualty events. Timber write-offs resulting from casualty events are recorded within the Consolidated Statements of Income and Comprehensive Income under the caption “Cost of sales.”

(b)The year ended December 31, 2021 includes $45.6 million of operating income attributable to noncontrolling interests in Timber Funds. Included in operating income attributable to noncontrolling interests in Timber Funds for the year ended December 31, 2021 is $41.2 million of income from Fund II Timberland Dispositions. The year ended December 31, 2021 also includes $10.3 million of income on Fund II Timberland Dispositions attributable to Rayonier and a $7.5 million gain on investment in Timber Funds. The year ended December 31, 2020 includes $11.6 million of operating loss attributable to noncontrolling interests in Timber Funds. Included in operating loss attributable to noncontrolling interests in Timber Funds for the year ended December 31, 2020 is $7.3 million related to timber write-offs resulting from casualty events. The year ended December 31, 2020 also includes $1.8 million of timber write-offs resulting from casualty events attributable to Rayonier. Timber write-offs resulting from casualty events are recorded within the Consolidated Statements of Income and Comprehensive Income under the caption “Cost of sales.”

(c)The years ended December 31, 2021 and December 31, 2020 include $44.8 million and $28.7 million, respectively, from Large Dispositions.

(d)The year ended December 31, 2020 includes $17.2 million of integration and restructuring costs related to the merger with Pope Resources. See Note 27 — Charges for Integration and Restructuring for additional details.


	Gross Capital Expenditures
	2021	2020	2019
Capital Expenditures (a)
Southern Timber	$35,790	$35,505	$34,574
Pacific Northwest Timber	16,585	11,367	11,220
New Zealand Timber	20,128	16,595	17,357
Timber Funds (b)	3,271	2,606	—
Real Estate	191	428	204

Corporate and other	—	—	641
Total capital expenditures	$75,965	$66,500	$63,996

Timberland Acquisitions (c)
Southern Timber	$168,188	$24,241	$98,927
Pacific Northwest Timber	—	—	7,340
New Zealand Timber	10,927	454	36,020



Total timberland acquisitions	$179,115	$24,695	$142,287

Total Gross Capital Expenditures	$255,080	$91,195	$206,283

(a)Excludes timberland acquisitions presented separately in addition to real estate development investments of $12.5 million, $6.5 million and $6.8 million in the years ended December 31, 2021, 2020 and 2019, respectively.

(b)The years ended December 31, 2021 and December 31, 2020 include $2.8 million and $2.3 million, respectively, of capital expenditures attributable to noncontrolling interests in Timber Funds.

(c)Excludes timberland acquired in the Pope Resources merger. For additional information, see Note 2 - Merger with Pope Resources.


	Depreciation, Depletion and Amortization
	2021	2020	2019
Southern Timber	$54,116	$61,827	$61,923
Pacific Northwest Timber	50,487	47,107	29,165
New Zealand Timber	27,005	25,030	27,761
Timber Funds (a)	97,943	11,884	—
Real Estate (b)	17,746	53,093	8,229

Corporate and other	1,208	1,427	1,157
Total	$248,505	$200,368	$128,235

(a)The year ended December 31, 2021 includes $78.9 million of depreciation, depletion, and amortization attributable to noncontrolling interests in Timber Funds. Included in depreciation, depletion, and amortization attributable to noncontrolling interests in Timber Funds for the year ended December 31, 2021 is $66.4 million related to Fund II Timberland Dispositions. The year ended December 31, 2021 also includes $16.6 million related to Fund II Timberland Dispositions attributable to Rayonier. The year ended December 31, 2020 includes $10.3 million of depreciation, depletion and amortization attributable to noncontrolling interests in Timber Funds.

(b)The years ended December 31, 2021 and December 31, 2020 include $9.8 million and $35.4 million, respectively, from Large Dispositions.


	Non-Cash Cost of Land and Improved Development
	2021	2020	2019



Timber Funds (a)	$20,239	—	—
Real Estate (b)	25,070	82,008	12,565


Total	$45,309	$82,008	$12,565

(a)The year ended December 31, 2021 includes $20.2 million of non-cash cost of land and improved development from Fund II Timberland Dispositions, of which $16.2 million was attributable to noncontrolling interests in Timber Funds and $4.0 million was attributable to Rayonier.

(b)The years ended December 31, 2021 and December 31, 2020 include $0.1 million and $51.6 million, respectively, from Large Dispositions.


	Geographical Operating Information
	Sales			Operating Income			Identifiable Assets
	2021	2020	2019	2021	2020	2019	2021	2020
United States	$732,995	$567,998	$354,395	$217,964	$44,877	$58,945	$3,046,707	$3,104,916
New Zealand	376,602	291,156	357,161	51,811	29,511	48,082	589,649	623,817
Total	$1,109,597	$859,154	$711,556	$269,775	$74,388	$107,027	$3,636,356	$3,728,733

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Revenue from Contract with Customer [Abstract]

REVENUE

12 Months Ended

Dec. 31, 2021

REVENUE

Contract Balances

The timing of revenue recognition, invoicing and cash collections results in accounts receivable and deferred revenue (contract liabilities) on the Consolidated Balance Sheets. Accounts receivable are recorded when we have an unconditional right to consideration for completed performance under the contract. Contract liabilities relate to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as (or when) we perform under the contract.

The following table summarizes revenue recognized during the years ended December 31, 2021 and 2020 that was included in the contract liability balance at the beginning of each year:


	Year Ended December 31,
	2021	2020
Revenue recognized from contract liability balance at the beginning of the year (a)	$10,809	$10,857

(a) Revenue recognized was primarily from hunting licenses and the use of advances on pay-as-cut timber sales.

The following tables present our revenue from contracts with customers disaggregated by product type for the years ended December 31, 2021, 2020 and 2019:


Year Ended	Southern Timber	Pacific Northwest Timber	New Zealand Timber	Timber Funds	Real Estate	Trading	Elim.	Total
December 31, 2021
Pulpwood	$95,995	$9,336	$42,836	$792	—	$11,369	—	$160,328
Sawtimber	79,154	127,768	237,262	38,042	—	82,276	—	564,502
Hardwood	4,671	—	—	—	—	—	—	4,671
Total Timber Sales	179,820	137,104	280,098	38,834	—	93,645	—	729,501
License Revenue, Primarily From Hunting	18,116	990	385	40	—	—	—	19,531
Other Non-Timber/Carbon Revenue	6,505	4,927	675	439	—	—	—	12,546
Agency Fee Income	—	—	—	—	—	1,399	—	1,399
Fund II Timberland Dispositions	—	—	—	156,752	—	—	—	156,752
Total Non-Timber Sales	24,621	5,917	1,060	157,231	—	1,399	—	190,228
Improved Development	—	—	—	—	51,713	—	—	51,713
Unimproved Development	—	—	—	—	37,500	—	—	37,500
Rural	—	—	—	—	43,088	—	—	43,088
Timberland & Non-Strategic	—	—	—	—	44	—	—	44
Conservation Easements	—	—	—	—	3,855	—	—	3,855
Deferred Revenue/Other (a)	—	—	—	—	(3,532)	—	—	(3,532)
Large Dispositions	—	—	—	—	56,048	—	—	56,048
Total Real Estate Sales	—	—	—	—	188,716	—	—	188,716
Revenue from Contracts with Customers	204,441	143,021	281,158	196,065	188,716	95,044	—	1,108,445
Lease Revenue	—	—	—	—	1,152	—	—	1,152
Intersegment	—	—	—	3,337	—	320	(3,657)	—
Total Revenue	$204,441	$143,021	$281,158	$199,402	$189,868	$95,364	($3,657)	$1,109,597
December 31, 2020
Pulpwood	$94,108	$10,581	$27,558	$784	—	$10,260	—	$143,291
Sawtimber	73,683	106,051	166,935	25,195	—	77,314	—	449,178
Hardwood	2,430	—	—	—	—	—	—	2,430
Total Timber Sales	170,221	116,632	194,493	25,979	—	87,574	—	594,899
License Revenue, Primarily from Hunting	17,765	843	307	17	—	—	—	18,932
Other Non-Timber/Carbon Revenue	3,845	3,334	7,515	124	—	—	—	14,818
Agency Fee Income	—	—	—	—	—	1,160	—	1,160
Total Non-Timber Sales	21,610	4,177	7,822	141	—	1,160	—	34,910
Improved Development	—	—	—	—	14,498	—	—	14,498
Unimproved Development	—	—	—	—	8,426	—	—	8,426
Rural	—	—	—	—	67,152	—	—	67,152
Timberland & Non-Strategic	—	—	—	—	19,255	—	—	19,255
Conservation Easements	—	—	—	—	3,099	—	—	3,099
Deferred Revenue/Other (a)	—	—	—		283	—	—	283
Large Dispositions	—	—	—	—	116,027	—	—	116,027
Total Real Estate Sales	—	—	—	—	228,740	—	—	228,740
Revenue from Contracts with Customers	191,831	120,809	202,315	26,120	228,740	88,734	—	858,549
Lease Revenue	—	—	—	—	605	—	—	605
Intersegment	—	—	—	3,437	—	239	(3,676)	—
Total Revenue	$191,831	$120,809	$202,315	$29,557	$229,345	$88,973	($3,676)	$859,154

December 31, 2019
Pulpwood	$86,537	$10,350	$32,925	—	—	$13,351	—	$143,163
Sawtimber	67,360	72,377	198,481	—	—	101,255	—	439,473
Hardwood	5,259	—	—	—	—	—	—	5,259
Total Timber Sales	159,156	82,727	231,406	—	—	114,606	—	587,895
License Revenue, Primarily from Hunting	18,270	717	361	—	—	—	—	19,348
Other Non-Timber/Carbon Revenue	16,685	1,970	10,094	—	—	—	—	28,749
Agency Fee Income	—	—	—	—	—	677	—	677
Total Non-Timber Sales	34,955	2,687	10,455	—	—	677	—	48,774
Improved Development	—	—	—	—	5,882	—	—	5,882
Unimproved Development	—	—	—	—	19,476	—	—	19,476
Rural	—	—	—	—	47,647	—	—	47,647
Timberland & Non-Strategic	—	—	—	—	1,338	—	—	1,338

Deferred Revenue/Other (a)	—	—	—	—	544	—	—	544
Total Real Estate Sales	—	—	—	—	74,887	—	—	74,887
Revenue from Contracts with Customers	194,111	85,414	241,861	—	74,887	115,283	—	711,556
Intersegment	—	—	—	—	—	155	(155)	—
Total Revenue	$194,111	$85,414	$241,861	—	$74,887	$115,438	($155)	$711,556

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

The following tables present our timber sales disaggregated by contract type for the years ended December 31, 2021, 2020 and 2019:


Year Ended	Southern Timber	Pacific Northwest Timber	New Zealand Timber	Timber Funds	Trading	Total
December 31, 2021
Stumpage Pay-as-Cut	$68,471	—	—	$768	—	$69,239
Stumpage Lump Sum	6,890	10,769	—	—	—	17,659

Total Stumpage	75,361	10,769	—	768	—	86,898

Delivered Wood (Domestic)	81,803	126,335	73,543	38,066	3,731	323,478
Delivered Wood (Export)	22,656	—	206,555	—	89,914	319,125
Total Delivered	104,459	126,335	280,098	38,066	93,645	642,603

Total Timber Sales	$179,820	$137,104	$280,098	$38,834	$93,645	$729,501

December 31, 2020
Stumpage Pay-as-Cut	$68,684	—	—	$1,731	—	$70,415
Stumpage Lump Sum	2,027	8,142	—	—	—	10,169

Total Stumpage	70,711	8,142	—	1,731	—	80,584

Delivered Wood (Domestic)	85,996	108,490	62,568	24,248	1,768	283,070
Delivered Wood (Export)	13,514	—	131,925	—	85,806	231,245
Total Delivered	99,510	108,490	194,493	24,248	87,574	514,315

Total Timber Sales	$170,221	$116,632	$194,493	$25,979	$87,574	$594,899

December 31, 2019
Stumpage Pay-as-Cut	$71,943	—	—	—	—	$71,943
Stumpage Lump Sum	7,428	2,749	—	—	—	10,177

Total Stumpage	79,371	2,749	—	—	—	82,120

Delivered Wood (Domestic)	71,054	79,978	80,974	—	5,488	237,494
Delivered Wood (Export)	8,731	—	150,432	—	109,118	268,281
Total Delivered	79,785	79,978	231,406	—	114,606	505,775

Total Timber Sales	$159,156	$82,727	$231,406	—	$114,606	$587,895

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Property, Plant and Equipment [Abstract]

TIMBERLAND ACQUISITIONS

12 Months Ended

Dec. 31, 2021

TIMBERLAND ACQUISITIONS

In 2021, we acquired approximately 100,000 acres of U.S. timberland located in Florida, Georgia, and Texas through seven transactions for an aggregate value of $168.2 million, which were funded from operating cash flow, proceeds from the sale of the Timber Funds business and use of the Company’s at-the-market equity offering program. Additionally, during 2021, we acquired approximately 3,000 acres of timberland (including approximately 1,000 acres of leased land) in New Zealand for approximately $10.9 million. These acquisitions were funded from operating cash flow.

In 2020, we acquired approximately 13,000 acres of U.S. timberland located in Alabama, Georgia, and Louisiana through three transactions for an aggregate value of $24.2 million. Approximately $24.1 million of these acquisitions were acquired using like-kind exchange proceeds while the remaining $0.1 million were funded from operating cash flow. Additionally, during 2020, we acquired approximately 2,000 acres of timberland (including approximately 2,000 acres of leased land) in New Zealand for approximately $0.5 million. These acquisitions were funded from operating cash flow.

The following table summarizes the timberland acquisitions for the years ended December 31, 2021 and 2020:


	2021		2020 (a)
	Cost	Acres	Cost	Acres
Alabama	—	—	$100	56
Florida	31,342	24,153	—	—
Georgia	38,339	24,776	18	20


Louisiana	—	—	24,123	12,558
Texas	98,507	51,568	—	—

New Zealand	10,927	2,676	454	2,378
Total Acquisitions	$179,115	103,173	$24,695	15,012

(a)Excludes acres and costs related to the Pope Resources merger. For more information on assets and liabilities acquired see Note 2 - Merger with Pope Resources.

LEASES

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

LEASES

TIMBERLAND LEASES

U.S. timberland leases typically have initial terms of approximately 30 to 65 years, with renewal provisions in some cases. New Zealand timberland lease terms typically range between 30 and 99 years. New Zealand lease arrangements generally consist of Crown Forest Licenses (“CFLs”), forestry rights and land leases. A CFL is a license arrangement to use government or privately owned lands to operate a commercial forest. CFLs generally extend indefinitely and may only be terminated upon a 35-year termination notice. If no termination notice is given, the CFLs renew automatically each year for a one-year term. Alternatively, some CFLs extend for a specific term. Once a CFL is terminated, we may be able to obtain a forestry right from the subsequent owner. A forestry right is a license arrangement with a private entity to use their lands to operate a commercial forest. Forestry rights terminate either upon the issuance of a termination notice (which can last 35 to 45 years), completion of harvest, or a specified termination date.

As of December 31, 2021, the New Zealand subsidiary has three CFLs comprising 11,000 gross acres or 9,000 net plantable acres under termination notice that are being relinquished as harvest activities are concluded, as well as two fixed-term CFLs comprising 3,000 gross acres or 2,000 net plantable acres expiring in 2062. Additionally, the New Zealand subsidiary has two forestry rights comprising 32,000 gross acres or 6,000 net plantable acres under termination notice that are being relinquished as harvest activities are concluded.

OTHER NON-TIMBERLAND LEASES

In addition to timberland holdings, we lease properties for certain office locations. Significant leased properties include a regional office in Lufkin, Texas; a Pacific Northwest Timber office in Hoquiam, Washington and a New Zealand Timber and Trading headquarters in Auckland, New Zealand.

LEASE MATURITIES, LEASE COST AND OTHER LEASE INFORMATION

The following table details our undiscounted lease obligations as of December 31, 2021 by type of lease and year of expiration:


	Year of Expiration
Lease obligations	Total	2022	2023	2024	2025	2026	Thereafter
Operating lease liabilities	$188,388	$9,038	$8,864	$8,604	$7,889	$7,176	$146,817
Total Undiscounted Cash Flows	$188,388	$9,038	$8,864	$8,604	$7,889	$7,176	$146,817
Imputed interest	(86,540)
Balance at December 31, 2021	$101,848
Less: Current portion	(8,432)
Non-current portion at December 31, 2021	$93,416

The following table details components of our lease cost for the years ended December 31, 2021, 2020, and 2019:


	Year Ended December 31,
Lease Cost Components	2021	2020	2019
Operating lease cost	$10,166	$9,647	$10,870
Variable lease cost (a)	196	230	235
Total lease cost (b)	$10,362	$9,877	$11,105

(a) The majority of timberland leases are subject to increases or decreases based on either the Consumer Price Index, Producer Price Index or market rates.

(b) Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for these leases are expensed on a straight line basis over the lease term. Short-term lease expense was not material for the year ended December 31, 2021.

The following table details components of our lease cost for the years ended December 31, 2021, 2020 and 2019:


	Year Ended December 31,
Supplemental Cash Flow Information Related to Leases:	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$2,389		$2,127		$2,567
Investing cash flows from operating leases	7,777		7,520		8,303
Total cash flows from operating leases	$10,166		$9,647		$10,870

Weighted-average remaining lease term in years - operating leases	29		29		28
Weighted-average discount rate - operating leases	5	%	5	%	5	%

Lessor Lease Information

In the Pope Resources merger, we acquired commercial and residential properties primarily concentrated in Port Gamble, Washington, which generate lease income under operating leases. As of December 31, 2021, properties subject to operating leases had an aggregate cost basis and accumulated depreciation of $3.5 million and $0.5 million, respectively. These leases typically range a few years with the option to extend on a case by case basis. Commercial and residential leases have non-lease components of taxes, insurance and common area maintenance, which we have elected not to separate under the ASC 842 practical expedient.

The following table details our lease income for the years ended December 31, 2021, 2020 and 2019:


	Year Ended December 31,
Lease Income Components	2021	2020	2019
Operating lease income	$1,152	$605	—

Total lease income	$1,152	$605	—

Future lease income as of December 31, 2021, based on payments due by period under the lease contracts, are presented in the following table:


		Year of Expiration
Lease assets	Total	2022	2023	2024	2025	2026	Thereafter
Operating lease Income	$638	$379	$173	$82	$2	$2	—

We apply the following practical expedients as allowed under ASC 842:


Practical Expedient						Description
Short-term leases						We do not record right-of-use assets or liabilities for short-term leases (a lease that at commencement date has a lease term of 12 months or less and does not contain a purchase option that is reasonably certain to be exercised).
Separation of lease and non-lease components						We do not separate non-lease components from the associated lease components if they have the same timing and pattern of transfer and, if accounted for separately, would both be classified as an operating lease.

LEASES

TIMBERLAND LEASES

OTHER NON-TIMBERLAND LEASES

LEASE MATURITIES, LEASE COST AND OTHER LEASE INFORMATION

The following table details our undiscounted lease obligations as of December 31, 2021 by type of lease and year of expiration:


	Year of Expiration
Lease obligations	Total	2022	2023	2024	2025	2026	Thereafter
Operating lease liabilities	$188,388	$9,038	$8,864	$8,604	$7,889	$7,176	$146,817
Total Undiscounted Cash Flows	$188,388	$9,038	$8,864	$8,604	$7,889	$7,176	$146,817
Imputed interest	(86,540)
Balance at December 31, 2021	$101,848
Less: Current portion	(8,432)
Non-current portion at December 31, 2021	$93,416

The following table details components of our lease cost for the years ended December 31, 2021, 2020, and 2019:


	Year Ended December 31,
Lease Cost Components	2021	2020	2019
Operating lease cost	$10,166	$9,647	$10,870
Variable lease cost (a)	196	230	235
Total lease cost (b)	$10,362	$9,877	$11,105

(a) The majority of timberland leases are subject to increases or decreases based on either the Consumer Price Index, Producer Price Index or market rates.

The following table details components of our lease cost for the years ended December 31, 2021, 2020 and 2019:


	Year Ended December 31,
Supplemental Cash Flow Information Related to Leases:	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$2,389		$2,127		$2,567
Investing cash flows from operating leases	7,777		7,520		8,303
Total cash flows from operating leases	$10,166		$9,647		$10,870

Weighted-average remaining lease term in years - operating leases	29		29		28
Weighted-average discount rate - operating leases	5	%	5	%	5	%

Lessor Lease Information

The following table details our lease income for the years ended December 31, 2021, 2020 and 2019:


	Year Ended December 31,
Lease Income Components	2021	2020	2019
Operating lease income	$1,152	$605	—

Total lease income	$1,152	$605	—

Future lease income as of December 31, 2021, based on payments due by period under the lease contracts, are presented in the following table:


		Year of Expiration
Lease assets	Total	2022	2023	2024	2025	2026	Thereafter
Operating lease Income	$638	$379	$173	$82	$2	$2	—

We apply the following practical expedients as allowed under ASC 842:


Practical Expedient						Description
Short-term leases						We do not record right-of-use assets or liabilities for short-term leases (a lease that at commencement date has a lease term of 12 months or less and does not contain a purchase option that is reasonably certain to be exercised).
Separation of lease and non-lease components						We do not separate non-lease components from the associated lease components if they have the same timing and pattern of transfer and, if accounted for separately, would both be classified as an operating lease.

NONCONTROLLING INTERESTS

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

NONCONTROLLING INTERESTS

NONCONTROLLING INTERESTS IN CONSOLIDATED AFFILIATES

Matariki Forestry Group

We maintain a 77% controlling financial interest in Matariki Forestry Group (the “New Zealand subsidiary”), a joint venture that owns or leases approximately 419,000 legal acres of New Zealand timberland. Accordingly, we consolidate the New Zealand subsidiary’s balance sheet and results of operations. The portions of the consolidated financial position and results of operations attributable to the New Zealand subsidiary’s 23% noncontrolling interest are reflected as an adjustment to income in our Consolidated Statements of Income and Comprehensive Income under the caption “Net (income) loss attributable to noncontrolling interests in consolidated affiliates.” Rayonier New Zealand Limited (“RNZ”), a wholly-owned subsidiary, serves as the manager of the New Zealand subsidiary.

The following table sets forth the income attributable to the New Zealand subsidiary’s noncontrolling interests:


	2021	2020	2019
Net income attributable to noncontrolling interests in the New Zealand subsidiary	$7,696	$4,920	$8,573

ORM Timber Fund II, Inc. (Fund II), ORM Timber Fund III LLC (Fund III), and ORM Timber Fund IV LLC. (Fund IV) (Collectively, the “Funds”)

Upon completion of the Pope Resources merger, we became the manager of three private equity timber funds, Fund II, Fund III, and Fund IV, consisting of 141,000 acres in the Pacific Northwest, and obtained ownership interests in the Funds of 20%, 5%, and 15%, respectively. Prior to the merger with Pope Resources, the Funds were formed by ORM LLC for the purpose of generating a return on investment through the acquisition, management, value enhancement and sale of timberland properties. Based upon an analysis under the variable interest entity guidance, we determined that we had the power to direct the activities that most significantly impacted the Funds’ economic success. Therefore, we were considered the primary beneficiary and were required under ASC 810 — Consolidation to consolidate the Funds. Income attributed to third-party investors is reflected as an adjustment to income in our Consolidated Statements of Income and Comprehensive Income under the caption “Net (income) loss attributable to noncontrolling interests in consolidated affiliates.”

On July 21, 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds to BTG Pactual’s Timberland Investment Group (TIG) for an aggregate sales price of $35.9 million and recognized in our Consolidated Statements of Income and Comprehensive Income a gain on the sale of $3.7 million under the caption of other operating income (expense), net. Due to the sale of our rights to manage Fund III and Fund IV, we determined that we no longer have the power to direct the activities that most significantly impact the success of Fund III and Fund IV. As a result, Timber Fund III and IV balance sheets and results of operations are only included in our consolidated financial statements through the date of the sale.

In addition, we completed the liquidation of Fund II timberland assets through three separate transactions during the third and fourth quarters of 2021 for an aggregate sales price of $156.8 million and recognized in our Consolidated Statements of Income and Comprehensive Income an aggregate gain on the sales of $51.5 million, of which $10.3 million was attributable to Rayonier. This consisted of a 13,000 acre sale in Washington on September 30, 2021 for a sales price and gain of $87.1 million and $35.9 million, respectively, a 5,000 acre sale in Oregon on October 5, 2021 for a sales price and gain of $37.2 million and $11.0 million, respectively, and a 13,000 acre sale in Oregon on November 1, 2021 for a sales price and gain of $32.5 million and $4.6 million, respectively.

As of December 31, 2021, we continue to manage and maintain a 20% ownership interest in Fund II, which is scheduled to terminate in March 2023. Prior to the termination of Fund II, the remaining capital will be distributed to Fund II investors. We continue to have the power to direct the activities that most significantly impact Fund II’s economic success. Therefore, we are considered the primary beneficiary and consolidate Fund II under ASC 810 — Consolidation. The obligations of Fund II do not have any recourse to the Company or the Operating Partnership and the assets of Fund II are not available to satisfy the Company or the Operating Partnership’s liabilities.

Due to Timber Fund II distribution requirements, we classified the portion of proceeds from Fund II Timberland Dispositions attributable to noncontrolling interests as a current asset under the caption “Restricted Cash, Timber Funds” on our Consolidated Balance Sheets. Additionally, we recognized a current liability under the caption “Distribution payable, Timber Funds” and a corresponding decrease in “Noncontrolling Interests in Consolidated Affiliates” on our Consolidated Balance Sheets. See Note 1 — Summary of Significant Accounting Policies, Note 8 — Variable Interest Entities and Note 2 4 — Restricted Cash for additional information.

The following table sets forth the income (loss) attributable to the Funds’ noncontrolling interests:


	2021	2020	2019
Net income (loss) attributable to noncontrolling interests in the Funds:	$45,124	($12,221)	—

Timber Fund II Carried Interest Incentive Fees

As a performance incentive to us as the manager and general partner of Timber Fund II, the Fund agreement provides for a “carried interest,” permitting us to receive a greater allocable share of the Fund’s earnings from investments relative to our capital contributions and correspondingly reducing the noncontrolling interests’ share of those earnings. After distributions sufficient for the Fund to pay each stockholder a return of 8% on its average investment and reduce its invested capital balance to zero, we are entitled to receive a 20% carried interest of any further distributions. Carried interest is earned to the extent that cumulative investment returns are positive and preferred dividend payment thresholds have been met.

Carried interest is recognized in our Consolidated Statements of Income and Comprehensive Income based on the contractual conditions set forth in the agreements governing the Fund as if the Fund were terminated and liquidated at the reporting date. In the year ended December 31, 2021, we recognized a gain on Fund II carried interest incentive fees of $3.8 million in our Consolidated Statements of Income and Comprehensive Income under the caption of other operating income (expense), net.

Ferncliff Investors

We maintain an ownership interest in Ferncliff Investors, a real estate joint venture entity. In 2017, Ferncliff Management and Ferncliff Investors were formed for the purpose of raising capital from third parties to invest in an unconsolidated real estate joint venture entity, Bainbridge Landing LLC, which is developing a five-acre parcel on Bainbridge Island, Washington into a multi-family community containing apartments and townhomes. Ferncliff Management is the manager and 33.33% owner of Ferncliff Investors, with the remaining ownership interest in Ferncliff Investors held by third-party investors. Ferncliff Investors holds a 50% interest in Bainbridge Landing LLC, the joint venture entity that owns and is developing the property.

Based upon an analysis under the variable interest entity guidance, we have the power to direct the activities that most significantly impact Ferncliff Investor’s economic success. Therefore, we are considered the primary beneficiary and are required under ASC 810 — Consolidation to consolidate Ferncliff Investors. The obligations of Ferncliff Investors do not have any recourse to the Company or the Operating Partnership.

Bainbridge Landing LLC is considered a voting interests entity. Ferncliff Investors accounts for its interest in the joint venture entity under the equity method because neither it nor the other member can exercise control over Bainbridge Landing LLC.

The Ferncliff Investors joint venture agreement provides for liquidation rights and distribution priorities that are disproportionate to each member’s ownership interest. Due to the complex nature of cash distributions to members, net income of the joint venture is allocated to members, including us, using the Hypothetical Liquidation at Book Value (HLBV) method. Under the HLBV method, Ferncliff Investors income or loss is allocated to the members based on the period change in each member’s claim on the book value of net assets, excluding capital contributions and distributions made during the period.

The following table sets forth the income (loss) attributable to Ferncliff Investors’ noncontrolling interests:


	2021	2020	2019
Net income (loss) attributable to noncontrolling interests in Ferncliff Investors:	$601	($526)	—

NONCONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP

Noncontrolling interests in the operating partnership relate to the third-party ownership of redeemable operating partnership Units. Net income attributable to the noncontrolling interests in the operating partnership is computed by applying the weighted average redeemable operating partnership units outstanding during the period as a percentage of the weighted average total units outstanding to the Operating Partnership’s net income for the period. If a noncontrolling unitholder redeems a unit for a registered common share of Rayonier or cash, the noncontrolling interests in the operating partnership will be reduced and the Company’s share in the Operating Partnership will be increased by the fair value of each security at the time of redemption.

The following table sets forth the Company’s noncontrolling interests in the operating partnership:


	2021	2020
Beginning noncontrolling interests in the operating partnership	$130,121	—
Issuances of redeemable operating partnership units	—	106,752
Adjustment of noncontrolling interests in the operating partnership	42,530	24,393
Conversions of redeemable operating partnership units to common shares	(40,676)	(496)
Net income attributable to noncontrolling interests in the operating partnership	4,516	528
Other comprehensive income attributable to noncontrolling interests in the operating partnership	1,601	2,540
Distributions to noncontrolling interests in the operating partnership	(4,269)	(3,596)
Total noncontrolling interests in the operating partnership	$133,823	$130,121

VARIABLE INTEREST ENTITIES

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITIES

ORM Timber Fund II, Inc. (Fund II), ORM Timber Fund III LLC (Fund III), and ORM Timber Fund IV LLC. (Fund IV) (Collectively, the “Funds”)

As mentioned in Note 1 — Summary of Significa nt Accounting Policies and Note 7 — Noncontrolling Interests, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds in July 2021. As a result, Timber Fund III and IV balance sheets and results of operations are only included in our consolidated financial statements through the date of the sale. In addition, we completed the liquidation of Fund II timberland assets through three separate transactions during the third and fourth quarters of 2021. As of December 31, 2021, we continue to maintain a 20% ownership interest in Fund II, which is scheduled to terminate in March 2023. Prior to the termination of Fund II, the remaining capital will be distributed to Fund II investors. We continue to have the power to direct the activities that most significantly impact Fund II’s economic success. Therefore, we are considered the primary beneficiary and consolidate Fund II under ASC 810 — Consolidation. For further information on the Funds, see Note 7 — Noncontrolling Interests.

The assets, liabilities and equity of Fund II as of December 31, 2021, were as follows:


Timber Funds			2021
Assets:
Cash and cash equivalents			$3,493
Restricted cash, Timber Funds (Note 24)			6,341
Accounts receivable			9


Intercompany receivable (a)			41
Other current assets			26
Total current assets			9,910


Total assets			$9,910
Liabilities and Equity:
Accounts payable			$22


Accrued taxes			32


Distributions payable, Timber Funds (b)			6,341
Other current liabilities (c)			3,546
Total current liabilities			9,941

Funds’ equity			(31)
Total liabilities and equity			$9,910

(a)Includes amounts due from other consolidated entities. These amounts are eliminated in the Consolidated Balance Sheets.

(b)Represents the portion of proceeds from Fund II Timberland Dispositions required to be distributed to noncontrolling interests.

(c)Includes $3.5 million of proceeds from Fund II Timberland Dispositions required to be distributed to other consolidated entities. These amounts are eliminated in the Consolidated Balance Sheets.

Ferncliff Investors

We maintain an ownership interest in Ferncliff Investors, a real estate joint venture entity. Based upon an analysis under the variable interest entity guidance, we have the power to direct the activities that most significantly impact the joint venture’s economic success. Therefore, we are considered the primary beneficiary and are required under ASC 810 — Consolidation to consolidate Ferncliff Investors. For further information on Ferncliff Investors, see Note 7 — Noncontrolling Interests.

The assets, liabilities and equity of Ferncliff Investors as of December 31, 2021, were as follows:


Ferncliff Investors			2021
Assets:
Cash and cash equivalents			$1,508


Total current assets			1,508


Total assets			$1,508
Liabilities and equity:








Total current liabilities			$472
Total non-current liabilities			2,170
Total liabilities			$2,642
Ferncliff Investors’ equity			(1,134)
Total liabilities and equity			$1,508

EARNINGS PER SHARE AND PER UNIT

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

EARNINGS PER SHARE AND PER UNIT

Basic earnings per common share (“EPS”) is calculated by dividing net income attributable to Rayonier Inc. by the weighted average number of common shares outstanding during the year. Diluted EPS is calculated by dividing net income attributable to Rayonier Inc., before net income attributable to noncontrolling interests in the operating partnership by the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of outstanding stock options, performance shares, restricted shares, restricted stock units and noncontrolling interests in operating partnership units.

The following table provides details of the calculations of basic and diluted earnings per common share of the Company for the three years ended December 31:


	2021	2020	2019
Earnings per common share - basic
Numerator:
Net Income	$210,487	$29,784	$67,678
Less: Net income attributable to noncontrolling interests in the operating partnership	(4,516)	(528)	—
Less: Net (income) loss attributable to noncontrolling interests in consolidated affiliates	(53,421)	7,828	(8,573)
Net income attributable to Rayonier Inc.	$152,550	$37,084	$59,105
Denominator:
Denominator for basic earnings per common share - weighted average shares	140,812,882	133,865,867	129,257,202
Basic earnings per common share attributable to Rayonier Inc.:	$1.08	$0.28	$0.46
Earnings per common share - diluted
Numerator:
Net Income	$210,487	$29,784	$67,678
Less: Net (income) loss attributable to noncontrolling interests in consolidated affiliates	(53,421)	7,828	(8,573)

Net income attributable to Rayonier Inc., before net income attributable to noncontrolling interests in the operating partnership	$157,066	$37,612	$59,105
Denominator:
Denominator for basic earnings per common share - weighted average shares	140,812,882	133,865,867	129,257,202
Add: Dilutive effect of:
Stock options	8,727	633	12,209
Performance shares, restricted shares and restricted stock units	416,527	198,955	328,977
Noncontrolling interests in operating partnership units	4,062,725	2,877,447	—


Denominator for diluted earnings per common share - adjusted weighted average shares	145,300,861	136,942,902	129,598,388


Diluted earnings per common share attributable to Rayonier Inc.:	$1.08	$0.27	$0.46


	2021	2020	2019
Anti-dilutive shares excluded from computations of diluted earnings per share:
Stock options, performance shares, restricted shares and restricted stock units	149,705	450,551	450,681

Basic earnings per unit (“EPU”) is calculated by dividing net income available to unitholders of Rayonier, L.P. by the weighted average number of units outstanding during the year. Diluted EPU is calculated by dividing net income available to unitholders of Rayonier, L.P. by the weighted average number of units outstanding adjusted to include the potentially dilutive effect of outstanding unit equivalents, including stock options, performance shares, restricted shares and restricted stock units.

The following table provides details of the calculations of basic and diluted earnings per unit of the Operating Partnership for the three years ended December 31:


	2021	2020	2019
Earnings per unit - basic
Numerator:
Net Income	$210,487	$29,784	$67,678
Less: Net (income) loss attributable to noncontrolling interests in consolidated affiliates	(53,421)	7,828	(8,573)
Net income available to unitholders	$157,066	$37,612	$59,105
Denominator:
Denominator for basic earnings per unit - weighted average units	144,875,607	136,743,314	129,257,202
Basic earnings per unit attributable to Rayonier, L.P.:	$1.08	$0.28	$0.46
Earnings per unit - diluted
Numerator:
Net Income	$210,487	$29,784	$67,678
Less: Net (income) loss attributable to noncontrolling interests in consolidated affiliates	(53,421)	7,828	(8,573)

Net income available to unitholders	$157,066	$37,612	$59,105
Denominator:
Denominator for basic earnings per unit - weighted average units	144,875,607	136,743,314	129,257,202
Add: Dilutive effect of unit equivalents:
Stock options	8,727	633	12,209
Performance shares, restricted shares and restricted stock units	416,527	198,955	328,977


Denominator for diluted earnings per unit - adjusted weighted average units	145,300,861	136,942,902	129,598,388


Diluted earnings per unit attributable to Rayonier, L.P.	$1.08	$0.27	$0.46


	2021	2020	2019
Anti-dilutive unit equivalents excluded from computations of diluted earnings per unit:
Stock options, performance shares, restricted shares and restricted stock units	149,705	450,551	450,681

DEBT

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

DEBT

Our debt consisted of the following at December 31, 2021 and 2020:


	2021	2020
Debt, excluding Timber Funds:
Term Credit Agreement borrowings due 2028 at a variable interest rate of 1.7% at December 31, 2021	$350,000	$350,000
Senior Notes due 2022 at a fixed interest rate of 3.75%	325,000	325,000
Senior Notes due 2031 at a fixed interest rate of 2.75%	450,000	—
Incremental Term Loan Agreement borrowings due 2026 at a variable interest rate of 1.75% at December 31, 2021	200,000	300,000
2020 Incremental Term Loan Facility borrowings due 2025 at a variable interest rate of 2.0% at December 31, 2020	—	250,000

New Zealand subsidiary noncontrolling interest shareholder loan due 2025 at a fixed interest rate of 2.95%	23,588	24,903
New Zealand subsidiary noncontrolling interest shareholder loan due 2026 at a fixed interest rate of 3.64%	27,519	—
Northwest Farm Credit Services Credit Facility with quarterly interest-only payments, collateralized by Core Timberlands, with the following tranches: (a)
Due 2025 at a fixed interest rate of 6.1%	—	10,000
Due 2028 at a fixed interest rate of 4.1%	—	11,000
Due 2033 at a fixed interest rate of 5.3%	—	16,000
Due 2036 at a fixed interest rate of 5.4%	—	8,000
Total principal debt, excluding Timber Funds	1,376,107	1,294,903
Add: Fair value adjustments, excluding Timber Funds	—	7,917
Less: Unamortized discounts, excluding Timber Funds	(3,426)	—
Less: Current maturities of long-term debt, excluding Timber Funds	(124,965)	—
Less: Deferred financing costs, excluding Timber Funds	(4,897)	(2,484)
Total long-term debt, excluding Timber Funds	1,242,819	1,300,336


Debt, Timber Funds:
Fund II Mortgages Payable, collateralized by Fund II timberlands with quarterly interest payments, as follows: (a)
Due 2022 at a fixed interest rate of 2.0%	—	11,000
Due 2022 at a fixed interest rate of 2.0%	—	14,000
Fund III Mortgages Payable, collateralized by Fund III timberlands with quarterly interest payments, as follows: (a)
Due 2023 at a fixed interest rate of 5.1%	—	17,980
Due 2024 at a fixed interest rate of 4.5%	—	14,400
Total principal debt, Timber Funds	—	57,380
Add: Fair value adjustments, Timber Funds	—	2,809
Less: Deferred financing costs, Timber Funds	—	(10)
Total long-term debt, Timber Funds	—	60,179



Total long-term debt	$1,242,819	$1,360,515

(a) See the section below labeled “Long-Term Debt Assumed in the Pope Resources Merger” for additional details.

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



2022			$325,000
2023			—
2024			—
2025			23,588
2026			227,519
Thereafter			800,000
Total debt			$1,376,107

TERM CREDIT AGREEMENT

In August 2015, we entered into a credit agreement with CoBank, ACB, as administrative agent, and a syndicate of Farm Credit institutions and other commercial banks to provide $550 million of new credit facilities, including a nine-year $350 million term loan facility. In April 2020, the maturity date of the Term Credit Agreement was extended from August 5, 2024 to April 1, 2028. In connection therewith, we recorded deferred financing costs in the amount of $0.5 million, which are being amortized over the term of the Term Credit Agreement. The periodic interest rate on the term loan facility is subject to a pricing grid based on our leverage ratio, as defined in the credit agreement. As of December 31, 2021, the periodic interest rate on the term loan facility was LIBOR plus 1.600%. Monthly payments of interest only are due on this loan through maturity. Following the closing of the term loan, we entered into several interest rate swap transactions to fix the cost of the term loan facility over its nine-year term. The term credit agreement allows us to receive annual patronage payments, which are profit distributions made by a cooperative to its member-users based on the quantity or value of business done with the member-user. We estimate the effective interest rate on the term loan facility to be approximately 3.0% after consideration of the interest rate swaps and estimated patronage refunds. For additional information on our interest rate swaps see Note 11 — Derivative Financial Instruments and Hedging Activities.

3.75% SENIOR NOTES ISSUED MARCH 2012

In March 2012, Rayonier Inc. issued $325 million of 3.75% Senior Notes due 2022, guaranteed by certain subsidiaries. Semi-annual payments of interest only are due on these notes through maturity. See the subsequent events section of Note 1 - Summary of Significant Accounting Policies for information about the repayment of our Senior Notes due 2022.

2.75% SENIOR NOTES ISSUED MAY 2021

In May 2021, Rayonier, L.P. issued $450 million of 2.75% Senior Notes due 2031, guaranteed by certain subsidiaries. Semi-annual payments of interest only are due on these notes through maturity. The Senior Notes due 2031 were sold at an issue price of 99.195% of their face value, before underwriters discount. Our net proceeds after deducting approximately $3.9 million of underwriting discounts and expenses, were approximately $442.5 million. The discount and debt issuance costs will be amortized to interest expense over the term of the notes using the effective interest method. A portion of the proceeds were used to repay $250 million outstanding under our 2020 Incremental Term Loan Agreement.

INCREMENTAL TERM LOAN AGREEMENT

In April 2016, we entered into an incremental term loan agreement with CoBank, ACB, as administrative agent, and a syndicate of Farm Credit institutions to provide a 10-year, $300 million incremental term loan. The periodic interest rate on the incremental term loan agreement is subject to a pricing grid based on our leverage ratio, as defined in the credit agreement. In June 2021, we entered into a Fourth Amendment to the Credit Agreement which decreased the applicable margin from LIBOR plus 1.900% to LIBOR plus 1.6500%. As a result of the debt modification, approximately $0.3 million in third-party expenses have been recognized in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous income, net.” In June 2021, we prepaid $100 million on the $300 million Incremental Term Loan Agreement. In connection with the partial prepayment, we recognized a loss on early extinguishment of debt of $0.1 million, representing the write-off of one-third of the unamortized deferred financing costs. The loss on early extinguishment of debt has been recorded in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous income, net.” As of December 31, 2021, the periodic interest rate on the incremental term loan was LIBOR plus 1.650%. Monthly payments of interest only are due on this loan through maturity. Following the closing of the incremental term loan, we entered into several interest rate swap transactions to fix the cost of the facility over its 10-year term. We estimate the effective interest rate on the incremental term loan facility to be approximately 2.4% after consideration of the interest rate swaps and estimated patronage payments. For additional information on our interest rate swaps see Note 11 — Derivative Financial Instruments and Hedging Activities.

2020 INCREMENTAL TERM LOAN AGREEMENT

In April 2020, we entered into an Incremental Term Loan Agreement, which provided for the advancement of a five-year $250 million senior unsecured incremental term loan facility. Proceeds from the 2020 Incremental Term Loan Facility were used to fund our acquisition of Pope Resources. In May 2021, the Incremental Term Loan Agreement was fully repaid. We recognized a loss on early extinguishment of debt of $0.6 million, representing the write-off of unamortized deferred financing costs. The loss on early extinguishment of debt has been recognized in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous income, net.”

2021 INCREMENTAL TERM LOAN AGREEMENT

In June 2021, we entered into an Incremental Term Loan Agreement, which provides us the ability to make an advance of $200 million on or before June 1, 2022. As of December 31, 2021, no advance had been made under this facility. We will use a future advance of $200 million under the 2021 Incremental Term Loan Facility to refinance a portion of the 3.750% Senior Notes due 2022 on a long-term basis, and as such, have excluded $200 million of principal from current maturities of long-term debt, net, in our Consolidated Balance Sheets. We deferred $0.3 million of commitment fees, which are being amortized to interest expense over the term of the access period, through June 1, 2022. Additionally, we deferred $0.2 million in debt issuance costs, which will be amortized to interest expense over the term of the facility, once any future advance is made. See the subsequent events section of Note 1 - S ummary of Signif icant Accounting Policies information about activity on the 2021 Incremental Term Loan subsequent to December 31, 2021.

REVOLVING CREDIT FACILITY

In June 2021, we amended our Revolving Credit Facility, originally entered into in 2015, with one amendment to the credit agreement: the amendment decreased the applicable margin from LIBOR plus 1.500% to LIBOR plus 1.2500% and extended its maturity date from April 1, 2025 to June 1, 2026. As a result of the revolver modification, approximately $0.3 million in lender fees have been deferred and are being amortized to interest expense over the remaining term of the revolver. In April 2020, we previously amended our Revolving Credit Facility, with two amendments to the credit agreement: the first amendment increased the limit on the Revolving Credit Facility from $200 million to $250 million and extended its maturity date from August 5, 2020 to April 1, 2025, and the second amendment further increased the limit to $300 million. In connection therewith, we recorded deferred financing costs in the amount of $1.2 million, which are being amortized over the term of the Revolving Credit Facility. See Note 25 - Other Assets for additional information about deferred financing costs related to revolving debt. The periodic interest rate on the revolving credit facility is subject to a pricing grid based on our leverage ratio, as defined in the credit agreement. As of December 31, 2021, the periodic interest rate on the revolving credit facility was LIBOR plus

1.250%, with an unused commitment fee of 0.175%. Monthly payments of interest only are due on this loan through maturity.

During the year ended December 31, 2021, we made no borrowings or repayments on our Revolving Credit Facility. At December 31, 2021, we had available borrowings of $299.1 million under the Revolving Credit Facility, net of $0.9 million to secure our outstanding letters of credit.

NEW ZEALAND SUBSIDIARY DEBT

WORKING CAPITAL FACILITY

In June 2021, the New Zealand subsidiary renewed its NZ$20 million working capital facility for an additional 12-month term. The NZ$20 million working capital facility is available for short-term operating cash flow needs of the New Zealand subsidiary. This facility holds a variable interest rate indexed to the 90-day New Zealand Bank Bill rate (“BKBM”). The margins are set for the term of the facility. During the year ended December 31, 2021, the New Zealand subsidiary made no borrowings or repayments on its working capital facility. At December 31, 2021, there was no outstanding balance on the working capital facility.

SHAREHOLDER LOAN DUE 2025

In September 2020, the New Zealand subsidiary made a capital distribution to its partners on a pro rata basis in order to redeem certain equity interests. A portion of this capital distribution was reinvested by the partners in shareholder loans to the New Zealand subsidiary. Our capital distribution and portion of the shareholder loan are eliminated in consolidation. The capital distribution to the minority shareholder and its reinvestment in the shareholder loan resulted in the recording of a noncontrolling interest share redemption of $5.1 million and a loan payable by the New Zealand subsidiary in the amount of $23.3 million due in 2025 at a fixed interest rate of 2.95%. As of December 31, 2021, the outstanding balance on the shareholder loan is $23.6 million. Except for changes in the New Zealand foreign exchange rate, there have been no adjustments to the carrying value of the shareholder loan since its inception.

SHAREHOLDER LOAN DUE 2026

In July 2021, the New Zealand subsidiary made a capital distribution to its partners on a pro rata basis in order to redeem certain equity interests, which was reinvested by the partners in shareholder loans to the New Zealand subsidiary. Our capital distribution and portion of the shareholder loan are eliminated in consolidation. The capital distribution to the minority shareholder and its reinvestment in the shareholder loan resulted in the recording of a loan payable by the New Zealand subsidiary in the amount of $28.1 million due in 2026 at a fixed interest rate of 3.64%. As of December 31, 2021, the outstanding balance on the shareholder loan due 2026 is $27.5 million. Except for changes in the New Zealand foreign exchange rate, there have been no adjustments to the carrying value of the shareholder loan since its inception. See Note 7 - Noncontrolling Interests for more information regarding the New Zealand subsidiary.

LONG-TERM DEBT ASSUMED IN THE POPE RESOURCES MERGER

Northwest Farm Credit Services Credit Facility

We assumed five tranches of a credit facility payable to Northwest Farm Credit Services (the “NWFCS Credit Facility”) totaling $45.0 million. In September 2021, we repaid the $45 million outstanding under our credit facility with Northwest Farm Credit Services (NWFCS). We recognized a gain on early extinguishment of debt of $7.2 million, representing the net write-off of unamortized deferred financing costs and fair market value adjustments, partially offset by a $6.2 million loss related to a make-whole fee due to debt prepayment. The net gain on early extinguishment of debt of approximately $0.9 million has been recognized in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous income, net.”

Fund II Mortgages Payable

We assumed Fund II’s two mortgages payable (the “Fund II Mortgages Payable”) to MetLife totaling $25.0 million. In September 2021, we repaid the $25.0 million outstanding under the Fund II Mortgages payable to MetLife. We recognized a loss on early extinguishment of debt of $6 thousand, representing the write-off of unamortized deferred financing costs. The loss on early extinguishment of debt has been recognized in the Consolidated Statements of Income and Comprehensive Income under the caption “Interest and other miscellaneous income, net.”

Fund III Mortgages Payable

We assumed Fund III’s two mortgages payable (the “Fund III Mortgages Payable”) to NWFCS totaling $32.4 million. In July 2021, we sold the rights to manage Fund III and Fund IV, as well as our ownership interests in both funds. Following the sale, Fund III’s two mortgages payable to NWFCS are no longer recognized in our Consolidated Balance Sheets as of December 31, 2021. See Note 7 - Noncontrolling Interests for additional information.

DEBT COVENANTS — EXCLUDING TIMBER FUNDS

In connection with our $350 million Term Credit Agreement, $200 million Incremental Term Loan Agreement, $200 million 2021 Incremental Term Loan Agreement and $300 million Revolving Credit Facility, customary covenants must be met, the most significant of which include interest coverage and leverage ratios.

The covenants listed below, which are the most significant financial covenants in effect as of December 31, 2021, are calculated on a trailing 12-month basis:


	Covenant Requirement		Actual Ratio		Favorable
Covenant EBITDA to consolidated interest expense should not be less than	2.5 to 1		12.6 to 1		10.1
Covenant debt to covenant net worth plus covenant debt shall not exceed	65	%	43	%	22	%

In addition to these financial covenants listed above, the Senior Notes due 2022, Senior Notes due 2031, Term Credit Agreement, Incremental Term Loan Agreement, 2021 Incremental Term Loan Facility, and Revolving Credit Facility include customary covenants that limit the incurrence of debt and the disposition of assets, among others. At December 31, 2021, we were in compliance with all applicable covenants.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2021

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

We are exposed to market risk related to potential fluctuations in foreign currency exchange rates and interest rates. We use derivative financial instruments to mitigate the financial impact of exposure to these risks. We also use derivative financial instruments to mitigate exposure to foreign currency risk due to the translation of the investment in Rayonier’s New Zealand-based operations from New Zealand dollars to U.S. dollars.

Accounting for derivative financial instruments is governed by Accounting Standards Codification Topic 815, Derivatives and Hedging, (“ASC 815”). In accordance with ASC 815, we record our derivative instruments at fair value as either assets or liabilities in the Consolidated Balance Sheets. Changes in the instruments’ fair value are accounted for based on their intended use. Gains and losses on derivatives that are designated and qualify for cash flow hedge accounting are recorded as a component of accumulated other comprehensive (loss) income (“AOCI”) and reclassified into earnings when the hedged transaction materializes. Gains and losses on derivatives that are designated and qualify for net investment hedge accounting are recorded as a component of AOCI and will not be reclassified into earnings until the investment is partially or completely liquidated. The changes in the fair value of derivatives not designated as hedging instruments and those which are no longer effective as hedging instruments, are recognized immediately in earnings.

FOREIGN CURRENCY EXCHANGE AND OPTION CONTRACTS

The New Zealand subsidiary’s export sales are predominantly denominated in U.S. dollars, and therefore its cash flows are affected by fluctuations in the exchange rate between the New Zealand dollar and the U.S. dollar. This exposure is partially managed by a natural currency hedge, as ocean freight payments and shareholder distributions are also paid in U.S. dollars. We manage any excess foreign exchange exposure through the use of derivative financial instruments. The New Zealand subsidiary typically hedges 50% to 90% of its estimated foreign currency exposure with respect to the following twelve months forecasted sales and purchases less distributions and up to 75% of the forward 12 to 18 months. Additionally, the New Zealand subsidiary will occasionally hedge up to 50% of its estimated foreign currency exposure with respect to the following 18 to 48 months forecasted sales and purchases, less distributions, when the New Zealand dollar is at a cyclical low versus the U.S. dollar. Foreign currency exposure from the New Zealand subsidiary’s trading operations is typically hedged based on the following three months forecasted sales and purchases. As of December 31, 2021, foreign currency exchange contracts and foreign currency option contracts had maturity dates through December 2023.

Foreign currency exchange and option contracts hedging foreign currency risk on export sales and ocean freight payments qualify for cash flow hedge accounting. We may de-designate these cash flow hedge relationships in advance or at the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously accumulated in other comprehensive (loss) income for de-designated hedges remains in AOCI until the forecasted transaction affects earnings. Changes in the value of derivative instruments after de-designation are recorded in earnings.

INTEREST RATE PRODUCTS

We are exposed to cash flow interest rate risk on our variable-rate debt and on anticipated debt issuances. We use variable-to-fixed interest rate swaps and forward-starting interest rate swap agreements to hedge this exposure. For these derivative instruments, we report the gains/losses from the fluctuations in the fair market value of the hedges in AOCI and reclassify them to earnings as interest expense in the same period in which the hedged interest payments affect earnings.

To the extent we de-designate or terminate a cash flow hedging relationship and the associated hedged item continues to exist, any unrealized gain or loss of the cash flow hedge at the time of de-designation remains in AOCI and is amortized using the straight-line method through interest expense over the remaining life of the hedged item. To the extent the associated hedged item is no longer effective, the gain or loss is reclassified out of AOCI to earnings immediately.

INTEREST RATE SWAPS

During the second quarter of 2021, we terminated and cash settled $250 million in notional value of our interest rate swaps, maturing in 2030, in connection with the repayment of $250 million outstanding under the 2020 Incremental Term Loan. Upon termination of the swap, we received $6.8 million from our counterparty. As of

December 31, 2021, there was a $15.9 million gain recorded in accumulated other comprehensive loss in connection with the terminated interest rate swap, which will be reclassified to earnings through interest expense over the remaining life of the hedged items, as the originally hedged cash flows remain probable.

During the second quarter of 2021, we terminated and cash settled $100 million in notional value of our interest rate swaps, maturing in 2026, in connection with the prepayment of $100 million on the 2026 Incremental Term Loan. Upon termination of the swap, we paid $2.2 million to our counterparty that was recognized immediately into earnings as interest expense, as the forecasted cash flows will no longer occur. See Note 10 — Debt for additional information.

The following table contains information on the outstanding interest rate swaps as of December 31, 2021:


Outstanding Interest Rate Swaps (a)
Date Entered Into	Term	Notional Amount	Related Debt Facility	Fixed Rate of Swap		Bank Margin on Debt		Total Effective Interest Rate (b)
August 2015	9 years	$170,000	Term Credit Agreement	2.20	%	1.60	%	3.80	%
August 2015	9 years	180,000	Term Credit Agreement	2.35	%	1.60	%	3.95	%
April 2016	10 years	100,000	Incremental Term Loan	1.60	%	1.65	%	3.25	%
April 2016	10 years	100,000	Incremental Term Loan	1.60	%	1.65	%	3.25	%

(a) All interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting.

(b) Rate is before estimated patronage payments.

TREASURY LOCKS

During the first quarter of 2020, we entered into three treasury lock agreements, which were designated and qualified as cash flow hedges. Prior to expiration, we de-designated and settled the treasury locks by converting them into interest rate swap lock agreements (discussed below).

As of December 31, 2021, there was a $17.3 million loss recorded in accumulated other comprehensive loss in connection with the settled treasury locks, which will be reclassified to earnings as interest expense over the life of the hedged item.

INTEREST RATE SWAP LOCKS

Upon de-designation, we converted the above treasury lock agreements to interest rate swap lock agreements, which were designated and qualified as cash flow hedges. During the second quarter of 2020, we de-designated and partially cash settled $11.1 million of the interest rate swap locks and converted them into an interest rate swap agreement.

As of December 31, 2021, there was a $1.2 million loss recorded in accumulated other comprehensive loss in connection with settled interest rate swap locks, which will be reclassified to earnings as interest expense over the life of the hedged item.

FORWARD-STARTING INTEREST RATE SWAPS

During the second quarter of 2021, we de-designated and settled $325 million in notional value of our forward-starting interest rate swap, maturing in 2032, by converting it into a new forward-starting interest rate swap agreement. As of December 31, 2021, there was a $9.7 million gain recorded in accumulated other comprehensive loss in connection with the converted forward-starting interest rate swap, which will be reclassified to earnings through interest expense over the remaining life of the hedged item.

The following table contains information on the outstanding forward-starting interest rate swaps as of December 31, 2021:

Outstanding Forward-Starting Interest Rate Swaps (a)

Date Entered Into

Term

Notional Amount

Fixed Rate of Swap

Related Debt Facility

Forward Date

Maximum Period Ending for Forecasted Issuance Date

April 2020

4 years

$100,000

0.88

Term Credit Agreement

August 2024

N/A

May 2020

4 years

50,000

0.74

Term Credit Agreement

August 2024

N/A

May 2021 (b)

7 years

200,000

0.77

Future Issuance

February 2022

N/A

(a) All forward-starting interest rate swaps have been designated as interest rate cash flow hedges and qualify for hedge accounting.

(b) The forward-starting interest rate swap entered into in May 2021 contained an embedded mark-to-market gain, which we recovered through a reduced charge in the fixed rate over what would have been charged for an at-market swap. See the subsequent events section of Note 1 - Summary of Significant Accounting Policies for additional information regarding the maturation of this forward-starting interest rate swap.

CARBON OPTIONS

The New Zealand subsidiary enters into carbon options from time to time to sell carbon assets. Changes in fair value of the carbon option contracts are recorded in “Interest and other miscellaneous income, net” as the contracts do not qualify for hedge accounting treatment. As of December 31, 2021, all existing carbon option contracts have expired.

The following table demonstrates the impact, gross of tax, of our derivatives on the Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2021, 2020 and 2019.


	Location on Statement of Income and Comprehensive Income	2021	2020	2019
Derivatives designated as cash flow hedges:
Foreign currency exchange contracts	Other comprehensive income (loss)	($7,965)	$5,376	$2,211
Foreign currency option contracts	Other comprehensive income (loss)	(1,556)	1,211	159
Interest rate products	Other comprehensive income (loss)	52,478	(76,567)	(29,893)
Interest rate products	Interest Expense	14,694	10,769	(2,296)





Derivatives not designated as hedging instruments:
Foreign currency exchange contracts	Interest and other miscellaneous income, net	—	—	$135
Carbon options	Interest and other miscellaneous income, net	—	563	(105)

During the next 12 months, the amount of the December 31, 2021 AOCI balance, net of tax, expected to be reclassified into earnings is a loss of approximately $10.8 million. The following table contains details of the expected reclassified amounts into earnings:


			Amount expected to be reclassified into earnings in next 12 months

Derivatives designated as cash flow hedges:
Foreign currency exchange contracts			($965)

Interest rate products			(9,882)
Total estimated loss on derivatives contracts			($10,847)

The following table contains the notional amounts of the derivative financial instruments recorded in the Consolidated Balance Sheets at December 31, 2021 and 2020:


	Notional Amount
	2021	2020
Derivatives designated as cash flow hedges:
Foreign currency exchange contracts	$149,250	$49,000
Foreign currency option contracts	14,000	28,000
Interest rate swaps	550,000	900,000
Forward-starting interest rate swaps	350,000	475,000

The following table contains the fair values of the derivative financial instruments recorded in the Consolidated Balance Sheets at December 31, 2021 and 2020. Changes in balances of derivative financial instruments are recorded as operating activities in the Consolidated Statements of Cash Flows:


		Fair Value Assets (Liabilities) (a)
	Location on Balance Sheet	2021	2020
Derivatives designated as cash flow hedges:
Foreign currency exchange contracts	Other current assets	$721	$4,968
	Other assets	86	1,050
	Other current liabilities	(2,061)	—
	Other non-current liabilities	(694)	—
Foreign currency option contracts	Other current assets	—	1,526
	Other assets	228	—
	Other current liabilities	—	(11)
	Other non-current liabilities	(270)	—

Interest rate swaps	Other non-current liabilities	(15,582)	(51,580)
Forward-starting interest rate swaps	Other assets	11,482	513
	Other non-current liabilities	—	(13,042)






Total derivative contracts:
Other current assets		$721	$6,494
Other assets		11,796	1,563
Total derivative assets		$12,517	$8,057

Other current liabilities		(2,061)	(11)
Other non-current liabilities		(16,546)	(64,622)
Total derivative liabilities		($18,607)	($64,633)

(a)See Note 12 — Fair Value Measurements for further information on the fair value of our derivatives including their classification within the fair value hierarchy.

OFFSETTING DERIVATIVES

Derivative financial instruments are presented at their gross fair values in the Consolidated Balance Sheets. Our derivative financial instruments are not subject to master netting arrangements, which would allow the right of offset.

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

A three-level hierarchy that prioritizes the inputs used to measure fair value was established in the Accounting Standards Codification 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.

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.

The following table presents the carrying amount and estimated fair values of our financial instruments at December 31, 2021 and 2020, using market information and what we believe to be appropriate valuation methodologies under generally accepted accounting principles:


	December 31, 2021			December 31, 2020
	Carrying Amount	Fair Value		Carrying Amount	Fair Value
Asset (Liability) (a)		Level 1	Level 2		Level 1	Level 2
Cash and cash equivalents, excluding Timber Funds	$358,680	$358,680	—	$80,454	$80,454	—
Cash and cash equivalents, Timber Funds	3,493	3,493	—	4,053	4,053	—
Restricted cash, Timber Funds (b)	6,341	6,341	—	—	—	—
Restricted cash, excluding Timber Funds (c)	625	625	—	2,975	2,975	—
Current maturities of long-term debt, excluding Timber Funds (d)	(124,965)	—	(125,288)	—	—	—

Long-term debt, excluding Timber Funds (d)	(1,242,819)	—	(1,245,148)	(1,300,336)	—	(1,313,631)
Long-term debt, Timber Funds (d)	—	—	—	(60,179)	—	(60,474)
Interest rate swaps (e)	(15,582)	—	(15,582)	(51,580)	—	(51,580)
Forward-starting interest rate swaps (e)	11,482	—	11,482	(12,529)	—	(12,529)
Foreign currency exchange contracts (e)	(1,948)	—	(1,948)	6,018	—	6,018
Foreign currency option contracts (e)	(42)	—	(42)	1,515	—	1,515


Noncontrolling interests in the operating partnership (f)	133,823	133,823	—	130,121	130,121	—

(a)We did not have Level 3 assets or liabilities at December 31, 2021 and 2020.

(b)Restricted cash, Timber Funds represents the portion of proceeds from Fund II Timberland Dispositions required to be distributed to noncontrolling interests. See Note 24 - Restricted Cash for additional information.

(c)Restricted cash, excluding Timber Funds represents cash held in escrow. See Note 24 - Restricted Cash for additional information.

(d)The carrying amount of long-term debt is presented net of deferred financing costs, unamortized discounts and fair value adjustments on non-revolving debt.. See Note 10 — Debt for additional information.

(e)See Note 11 — Derivative Financial Instruments and Hedging Activities for information regarding the Balance Sheet classification of our derivative financial instruments.

(f)Noncontrolling interests in the operating partnership is neither an asset nor liability and is classified as temporary equity in the Company’s Consolidated Balance Sheets. This relates to the ownership of Rayonier, L.P. units by various individuals and entities other than the Company.

We use the following methods and assumptions in estimating the fair value of our financial instruments:

Cash and cash equivalents and Restricted cash — 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. The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value.

Interest rate swap agreements — The fair value of interest rate contracts is determined by discounting the expected future cash flows, for each instrument, at prevailing interest rates.

Foreign currency exchange contracts — The fair value of foreign currency exchange contracts is determined by a mark-to-market valuation, which estimates fair value by discounting the difference between the contracted forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate.

Foreign currency option contracts — The fair value of foreign currency option contracts is based on a mark-to-market calculation using the Black-Scholes option pricing model.

Noncontrolling interests in the operating partnership — The fair value of noncontrolling interests in the operating partnership is determined based on the period-end closing price of Rayonier Inc. common shares.

Commitments and Contingencies Disclosure [Abstract]

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

COMMITMENTS

12 Months Ended

Dec. 31, 2021

COMMITMENTS

At December 31, 2021, the future minimum payments under non-cancellable commitments were as follows:


	Environmental Remediation (a)	Development Projects (b)	Commitments (c)	Total
2022	$695	$14,316	$14,722	$29,733
2023	3,838	267	12,996	17,101
2024	3,838	267	9,347	13,452
2025	995	267	5,542	6,804
2026	426	267	3,430	4,123
Thereafter	1,013	3,899	4,589	9,501
	$10,805	$19,283	$50,626	$80,714

(a)Environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages (NRD) in Port Gamble, Washington. See Note 15 - Environmental and Natural Resource Damage Liabilities for additional information.

(b)Primarily consisting of payments expected to be made on our Wildlight and Richmond Hill development projects.

(c)Commitments include payments expected to be made on derivative financial instruments (foreign exchange contracts, interest rate swaps and forward-starting interest rate swaps) and other purchase obligations.

CONTINGENCIES	12 Months Ended
CONTINGENCIES	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	CONTINGENCIESWe have been named as a defendant in various lawsuits and claims arising in the normal course of business. While we have procured reasonable and customary insurance covering risks normally occurring in connection with our businesses, we have in certain cases retained some risk through the operation of large deductible insurance plans, primarily in the areas of executive risk, property, automobile and general liability. These pending lawsuits and claims, either individually or in the aggregate, are not expected to have a material adverse effect on our financial position, results of operations, or cash flow.

ENVIRONMENTAL NATURAL RESOURCE DAMAGE LIABILITIES

12 Months Ended

Dec. 31, 2021

Environmental Remediation Obligations [Abstract]

ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES

ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIESVarious federal and state environmental laws in the states in which we operate place cleanup or restoration liability on the current and former owners of affected real estate. These laws are often a source of “strict liability,” meaning that an owner or operator need not necessarily have caused, or even been aware of, the release of contaminated materials. Similarly, there are certain environmental laws that allow state, federal, and tribal trustees (collectively, the “Trustees”) to bring suit against property owners to recover damage for injuries to natural resources. Like the liability that attaches to current property owners in the cleanup context, liability for natural

resource damages (“NRD”) can attach to a property simply because an injury to natural resources resulted from releases of contaminated materials on the owner’s property, regardless of culpability for the release.

In connection to the merger with Pope Resources, we assumed ownership of certain real estate in Port Gamble, Washington, which requires environmental remediation under these laws.

An analysis of environmental and NRD liabilities from December 31, 2020 to December 31, 2021 is shown below:


			Port Gamble, WA
Non-current portion at December 31, 2020			$10,615
Plus: Current portion			1,026
Total Balance at December 31, 2020			11,641
Expenditures charged to liabilities			(941)
Increase in liabilities			105

Total Balance at December 31, 2021			10,805
Less: Current portion			(695)
Non-current portion at December 31, 2021			$10,110

These estimates were based on assumptions that we believe to be reasonable; however, actual results may differ from these estimates. See Note 2 - Merger with Pope Resources for information regarding the final allocation of fair value to environmental and NRD liabilities assumed in the merger with Pope Resources. It is expected that the millsite cleanup and NRD restoration will occur over the next one to three years, while the monitoring of the Port Gamble Bay, millsite and landfills will continue for an additional 10 to 15 years. NRD costs are subject to change as the scope of the restoration projects become more clearly defined. It is reasonably possible that these components of the liability may increase as the project progresses. Management continues to monitor the Port Gamble cleanup process and will make adjustments as needed. Should any future circumstances result in a change to the estimated cost of the project, we will record an appropriate adjustment to the liability in the period it becomes known and when we can reasonably estimate the amount. For further information on the timing and amount of future payments related to our environmental remediation liabilities, see Note 13 - Commitments.

GUARANTEES

12 Months Ended

Dec. 31, 2021

Guarantees [Abstract]

GUARANTEES

We provide financial guarantees as required by creditors, insurance programs, and various governmental agencies. As of December 31, 2021, the following financial guarantees were outstanding:


Financial Commitments (a)			Maximum Potential Payment
Standby letters of credit			$885

Surety bonds (b)			12,238
Total financial commitments			$13,123

(a)We have not recorded any liabilities for these financial commitments in the Consolidated Balance Sheets. The guarantees are not subject to measurement, as the guarantees are dependent on our own performance.

(b)Surety bonds are issued primarily to secure performance obligations related to various operational activities, to provide collateral for our Wildlight development project in Nassau County, Florida and in connection with pending and completed sales from the Harbor Hill project in Gig Harbor, Washington. These surety bonds expire at various dates during 2022, 2023 and 2024 and are expected to be renewed as required.

HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

HIGHER AND BETTER USE TIMBERLANDS AND REAL ESTATE DEVELOPMENT INVESTMENTS

We continuously assess potential alternative uses of our timberlands, as some properties may become more valuable for development, residential, recreation or other purposes. We periodically transfer, via a sale or contribution from the real estate investment trust (“REIT”) entities to taxable REIT subsidiaries (“TRS”), higher and better use (“HBU”) timberlands to enable land-use entitlement, development or marketing activities. We also acquire HBU properties in connection with timberland acquisitions. These properties are managed as timberlands until sold or developed. While the majority of HBU sales involve rural and recreational land, we also selectively pursue various land-use entitlements on certain properties for residential, commercial and industrial development in order to enhance the long-term value of such properties. For selected development properties, we also invest in targeted infrastructure improvements, such as roadways and utilities, to accelerate the marketability and improve the value of such properties.

Changes in higher and better use timberlands and real estate development investments from December 31, 2020 to December 31, 2021 are shown below:


	Higher and Better Use Timberlands and Real Estate Development Investments
	Land and Timber	Development Investments	Total
Non-current portion at December 31, 2020	$79,901	$28,617	$108,518
Plus: Current portion (a)	212	6,544	6,756
Total Balance at December 31, 2020	80,113	35,161	115,274
Non-cash cost of land and improved development	(11,894)	(8,211)	(20,105)
Amortization of parcel real estate development investments	—	(5,923)	(5,923)
Timber depletion from harvesting activities and basis of timber sold in real estate sales	(1,301)	—	(1,301)
Capitalized real estate development investments (b)	—	21,963	21,963
Capital expenditures (silviculture)	191	—	191

Intersegment transfers	13,281	—	13,281
Purchase price allocation adjustment (c)	8,238	—	8,238

Total Balance at December 31, 2021	88,628	42,990	131,618
Less: Current portion (a)	(718)	(24,022)	(24,740)
Non-current portion at December 31, 2021	$87,910	$18,968	$106,878

(a)The current portion of Higher and Better Use Timberlands and Real Estate Development Investments is recorded in Inventory. See Note 18 — Inventory for additional information.

(b)Capitalized real estate development investments includes $0.6 million of capitalized interest and $9.4 million of parcel real estate development investments. Parcel real estate development investments represent investments made for specific lots and/or commercial parcels that are currently under contract or expected to be ready for market within a year.

(c)Reflects measurement period adjustments on HBU properties acquired in the merger with Pope Resources. The final allocation of fair value to HBU properties acquired in the merger is approximately $34.7 million. This includes development properties in the town of Port Gamble, Washington, development projects in Gig Harbor, Kingston, and Bremerton, Washington and various other assets. See Note 2 - Merger with Pope Resources for additional information.

INVENTORY

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

INVENTORY

As of December 31, 2021 and 2020, our inventory was solely comprised of finished goods, as follows:


	2021	2020

Real estate inventory (a)	$24,740	$6,756
Log inventory	3,783	3,838
Total inventory	$28,523	$10,594

(a)Represents the cost of HBU real estate (including capitalized development investments) under contract to be sold. See Note 17 — Higher and Better Use Timberlands and Real Estate Development Investments for additional information.

OTHER OPERATING INCOME (EXPENSE), NET

12 Months Ended

Dec. 31, 2021

Other Income and Expenses [Abstract]

OTHER OPERATING INCOME (EXPENSE), NET

The following table provides the composition of Other operating income (expense), net for the three years ended December 31:


	2021	2020	2019
Gain (loss) on foreign currency remeasurement, net of cash flow hedges	$6,823	($3,503)	($3,077)
Gain on sale or disposal of property plant & equipment	75	121	56




Gain on investment in Timber Funds (a)	7,482	—	—
Log trading marketing fees	6	56	314



Cost related to the merger with Pope Resources (b)	—	(17,166)	—
Equity income (loss) related to Bainbridge Landing LLC joint venture (c)	102	(721)	—
Miscellaneous expense, net	(404)	(472)	(1,826)
Total	$14,084	($21,685)	($4,533)

(a)See Note 7 - Noncontrolling Interests and Note 8 - Variable Interest Entities for additional information on Timber Funds.

(b)Includes legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources. See Note 2 - Merger with Pope Resources and Note 27 - Charges for Integration and Restructuring for additional information.

(c)See Note 7 - Noncontrolling Interests and Note 8 - Variable Interest Entities for additional information on Ferncliff Investors.

EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT PLANS

We have one qualified non-contributory defined benefit pension plan covering a portion of its employees and an unfunded plan that provides benefits in excess of amounts allowable under current tax law in the qualified plans. We closed enrollment in the pension plans to salaried employees hired after December 31, 2005. Effective December 31, 2016, we froze benefits for all employees participating in the pension plan. In lieu of the pension plan, we provide those employees with an enhanced 401(k) plan match similar to what is currently provided to employees hired after December 31, 2005. 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 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
	2021	2020	2021	2020
Change in Projected Benefit Obligation
Projected benefit obligation at beginning of year	$100,469	$90,261	$1,886	$1,634
Service cost	—	—	8	6
Interest cost	2,228	2,706	45	51


Actuarial loss (gain)	(5,112)	11,413	(35)	209


Benefits paid	(3,519)	(3,413)	(14)	(14)
Expenses paid	(267)	(498)	—	—
Projected benefit obligation at end of year	$93,799	$100,469	$1,890	$1,886


Change in Plan Assets
Fair value of plan assets at beginning of year	$78,883	$66,460	—	—
Actual return on plan assets	9,896	13,329	—	—
Employer contributions	86	3,005	14	14

Benefits paid	(3,519)	(3,413)	(14)	(14)
Other expense	(267)	(498)	—	—
Fair value of plan assets at end of year	$85,079	$78,883	—	—


Funded Status at End of Year:
Net accrued benefit cost	($8,720)	($21,586)	($1,890)	($1,886)


Amounts Recognized in the Consolidated
Balance Sheets Consist of:

Current liabilities	($86)	($86)	($46)	($41)
Noncurrent liabilities	(8,634)	(21,500)	(1,844)	(1,845)
Net amount recognized	($8,720)	($21,586)	($1,890)	($1,886)

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:


	2021	2020
Projected benefit obligation	$93,799	$100,469
Accumulated benefit obligation	93,799	100,469
Accumulated postretirement benefit obligation	1,890	1,886
Fair value of plan assets	85,079	78,883

ACTUARIAL (GAIN) LOSS

PENSION

Key components of the actuarial gains and losses contributing to the period change in the benefit obligation are as follows:

•Changes in participant demographics resulted in an actuarial gain of approximately $0.5 million, which is primarily due to high mortality among participants.

•Changes in mortality assumptions resulted in an actuarial loss of approximately $0.3 million.

•Changes in the discount rate from 2.26% to 2.65% resulted in an actuarial gain of approximately $5.1 million.

POSTRETIREMENT

Key components of the actuarial gains and losses contributing to the period change in the benefit obligation are as follows:

•Re-measurement of current census data resulted in a demographic loss of $0.1 million.

•Changes in the discount rate from 2.42% to 2.75% resulted in an actuarial gain of approximately $0.1 million.

OTHER COMPREHENSIVE INCOME

Net gains or losses recognized in other comprehensive (loss) income for the three years ended December 31 are as follows:


	Pension			Postretirement
	2021	2020	2019	2021	2020	2019
Net gains (losses)	$11,262	($1,587)	($1,514)	$40	($207)	($285)

Net gains or losses 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
	2021	2020	2019	2021	2020	2019
Amortization of losses (gains)	$1,154	$861	$449	$20	$8	—

ACCUMULATED OTHER COMPREHENSIVE INCOME (AOCI)

Net losses that have not yet been included in pension and postretirement expense for the two years ended December 31, but have been recognized as a component of AOCI are as follows:


	Pension		Postretirement
	2021	2020	2021	2020

Net losses	($12,627)	($25,043)	($431)	($491)

Deferred income tax benefit	1,216	1,216	6	6
AOCI	($11,411)	($23,827)	($425)	($485)

NET PENSION AND POSTRETIREMENT BENEFIT (CREDIT) COST

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


	Pension			Postretirement
	2021	2020	2019	2021	2020	2019
Components of Net Periodic Benefit (Credit) Cost
Service cost	—	—	—	$8	$6	$6
Interest cost	2,228	2,706	3,197	45	51	54
Expected return on plan assets	(3,746)	(3,504)	(3,107)	—	—	—

Amortization of losses (gains)	1,154	861	449	20	8	—



Net periodic benefit (credit) cost	($364)	$63	$539	$73	$65	$60

The service cost component of our benefit expense is recorded within the operating expense line item “Selling and general expenses” within the Consolidated Statements of Income. All other components of the benefit costs expense are included within the “Interest and miscellaneous income, net” line item of the Consolidated Statements of Income.

VALUATION ASSUMPTIONS

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
	2021		2020		2019		2021		2020		2019
Assumptions used to determine benefit obligations at December 31:
Discount rate	2.65	%	2.26	%	3.06	%	2.75	%	2.42	%	3.16	%

Assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	2.26	%	3.06	%	4.11	%	2.42	%	3.16	%	4.18	%
Expected long-term return on plan assets	5.72	%	5.72	%	5.72	%	—		—		—

DISCOUNT RATE

At December 31, 2021, the pension plan’s discount rate was 2.7%. The discount rate is derived from the Financial Times Stock Exchange (FTSE) Pension Discount Curve (f/k/a Citigroup). The Pension Discount Curve (PDC) is a set of yields on hypothetical AA, zero coupon bonds whose maturities range from 6 months up to 30 years. The yields of the PDC are used to discount pension liabilities. The PDC is calculated based on a universe of AA rated corporate bonds from the FTSE US Broad Investment-Grade Bond Index and the yields of the FTSE Treasury model curve.

The pension plan's future expected cash flows are then matched to the spot rates on the yield curve and a single equivalent discount rate is determined, which produces the same present value as the spot rates.

EXPECTED LONG-TERM RETURN ON PLAN ASSETS

In 2021, the expected return on plan assets remained at 5.7%, which is based on historical returns on current asset allocations and expected returns using the Black-Litterman method.

INVESTMENT OF PLAN ASSETS

Our 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.

In 2020, we transitioned to a liability-driven investment (“LDI”) strategy. An LDI strategy focuses on maintaining a close to fully-funded status over the long-term with minimal funded status risk. This is achieved by investing more of the plan assets in fixed income instruments to more closely match the duration of the plan liability. The investment allocation to fixed income instruments will increase as the plans' funded status increases. Investment target allocation percentages for equity securities can range up to 80 percent.

Our pension plans’ asset allocation (excluding short-term investments) at December 31, 2021 and 2020 are as follows:


	Percentage of Plan Assets
Asset Category	2021		2020
Domestic equity securities	29	%	44	%
International equity securities	18	%	30	%
Domestic fixed income securities	51	%	21	%
International fixed income securities	—		3	%
Real estate fund	2	%	2	%
Total	100	%	100	%

Investments within the equity categories may include large capitalization, small capitalization and emerging market securities. Pension assets did not include a direct investment in Rayonier common shares during the years ended December 31, 2021 and 2020.

NET ASSET VALUE MEASUREMENTS

Separate investment accounts are measured using the unit value calculated based on the Net Asset Value (“NAV”) of the underlying assets. The NAV is based on the fair value of the underlying investments held by each fund less liabilities divided by the units outstanding as of the valuation date. These funds are not publicly traded; however, the unit price calculation is based on observable market inputs of the funds’ underlying assets.

The following table sets forth the net asset value of the plan assets as of December 31, 2021 or 2020:


	December 31, 2021	December 31, 2020
Asset Category


Investments at Net Asset Value:
Separate Investment Accounts	$85,079	$78,883
Total Investments at Net Asset Value	$85,079	$78,883

CASH FLOWS

Our expected benefit payments to be made for the next 10 years are as follows:


	Pension Benefits	Postretirement Benefits
2022	$3,896	$46
2023	4,077	50
2024	4,242	53
2025	4,389	56
2026	4,498	60
2027-2031	23,525	359

We have no mandatory pension contribution requirements in 2022.

DEFINED CONTRIBUTION PLANS

We provide a defined contribution plan to all of our eligible employees. Upon completion of the merger with Pope Resources, former eligible Pope Resource employees were immediately eligible to participate in the Rayonier 401(k) plan. Pope Resources employees’ year of service were credited to the 401(k) plan for vesting purposes. Company match contributions charged to expense for these plans were $1.1 million, $1.1 million and $1.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. The defined contribution plan includes Rayonier common shares with a fair market value of $11.0 million and $8.5 million at December 31, 2021 and 2020, respectively. As of June 1, 2016, the Rayonier Inc. Common Stock Fund was closed to new contributions. Transfers out of the fund will continue to be permitted, but no new investments or transfers into the fund are allowed.

As discussed above, the defined benefit pension plan is currently frozen. In lieu of the pension plan, employees are eligible to receive an enhanced match contribution. Company enhanced match contributions charged to expense for the years ended December 31, 2021, 2020 and 2019 were $1.2 million, $1.0 million and $0.9 million, respectively.

The entire disclosure for retirement benefits.

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Share-based Payment Arrangement [Abstract]

INCENTIVE STOCK PLANS

12 Months Ended

Dec. 31, 2021

INCENTIVE STOCK PLANS

The Rayonier Incentive Stock Plan (the “Stock Plan”) provides up to 15.8 million shares to be granted for incentive stock options, non-qualified stock options, stock appreciation rights, performance shares, restricted stock and restricted stock units, subject to certain limitations. At December 31, 2021, a total of 2.4 million shares were available for future grants under the Stock Plan. Under the Stock Plan, shares available for issuance are reduced by 1 share for each option or right granted and by 2.27 shares for each performance share, restricted share or restricted stock unit granted. We issue new shares of stock upon the exercise of stock options, the granting of restricted stock, and the vesting of performance shares and restricted stock units.

A summary of our stock-based compensation cost is presented below:


	2021	2020	2019
Selling and general expenses	$8,255	$6,839	$6,416
Cost of sales	816	693	378
Timber and Timberlands, net (a)	206	170	110
Other operating expense, net (b)	—	324	—
Total stock-based compensation	$9,277	$8,026	$6,904

Tax benefit recognized related to stock-based compensation expense (c)	$487	$421	$362

(a)Represents amounts capitalized as part of the overhead allocation of timber-related costs.

(b)Represents expense associated with the acceleration of share-based compensation on Pope replacement awards related to qualifying terminations. See Note 27 - Charges for Integration and Restructuring for additional details.

(c)A valuation allowance is recorded against the tax benefit recognized as we do not expect to be able to realize the benefit in the future.

FAIR VALUE CALCULATIONS BY AWARD

RESTRICTED STOCK

Restricted stock granted to employees under the Stock Plan generally vests in fourths on the first, second, third and fourth anniversary of the grant date. Restricted stock granted to senior management generally vests in thirds on the third, fourth, and fifth anniversary of the grant date. Periodically, other one-time restricted stock grants are issued to employees for special purposes, such as new hire, promotion or retention, and can vest ratably over, or upon completion of, a defined period of time. Generally, holders of restricted stock receive dividend equivalent payments on outstanding restricted shares. Restricted stock granted to members of the board of directors generally vests immediately upon issuance and is subject to certain holding requirements. The fair value of each share granted is equal to the share price of the Company’s stock on the date of grant. We have elected to value each grant in total and recognize the expense on a straight-line basis from the grant date of the award to the latest vesting date. As permitted, we do not estimate a forfeiture rate for non-vested shares. Accordingly, unexpected forfeitures will lower stock-based compensation during the period in which they occur.

REPLACEMENT RESTRICTED STOCK AWARDS FROM THE MERGER WITH POPE RESOURCES

As a result of the merger with Pope Resources, Rayonier issued 69,176 shares of restricted stock awards (“replacement awards”) in connection with unvested Pope Resources restricted units. Eligible outstanding Pope Resources restricted units were canceled and exchanged for replacement awards, pursuant to an exchange ratio in the merger agreement designed to maintain the intrinsic value of the awards immediately prior to the exchange.

The replacement awards issued have similar vesting provisions as the terms of existing Rayonier restricted stock. Expense for the replacement awards that were not fully vested prior to the date of the merger is expected to be recognized over a weighted average remaining service period of approximately 16 months unless a qualifying termination occurs. A qualifying termination of an awardee will result in the acceleration of vesting and expense recognition in the period that the qualifying termination occurs. Qualifying terminations during the years ended December 31, 2021 and 2020 resulted in the accelerated vesting of 1,430 and 15,049 of the replacement awards and recognition of approximately $0.1 million and $0.3 million of expense, respectively.

As of December 31, 2021, there was $0.7 million of unrecognized compensation cost attributable to our restricted stock. We expect to recognize this cost over a weighted average period of 1 year.

A summary of our restricted stock is presented below:


	2021	2020	2019
Restricted shares granted (a)	22,140	100,452	24,592
Weighted average price of restricted shares granted	$37.36	$23.15	$30.90
Intrinsic value of restricted stock outstanding (b)	$3,062	$4,666	$5,540
Grant date fair value of restricted stock vested	3,121	2,755	5,339
Cash used to purchase common shares from current and former employees to pay withholding tax requirements on restricted shares vested	869	566	1,610

(a)The year ended December 31, 2020 includes 69,176 replacement awards issued as a result of the merger with Pope Resources.

(b)Intrinsic value of restricted stock outstanding is based on the market price of the Company’s stock at December 31, 2021.


	2021
	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested Restricted Shares at January 1,	158,820	$28.47
Granted	22,140	37.36
Vested (a)	(104,917)	29.74
Cancelled	(181)	34.71
Non-vested Restricted Shares at December 31,	75,862	$29.29

(a)The year ended December 31, 2021 includes 1,430 replacement awards vested as a result of acceleration due to qualifying terminations.

RESTRICTED STOCK UNITS

In April 2019, we began granting restricted stock units instead of restricted stock to employees. Most attributes of our restricted stock described herein, including dividend payments, fair value measurement and expense recognition, apply equally to restricted stock units granted under the Stock Plan. However, beginning with the restricted stock units granted in 2021, there is no distinction between the vesting characteristics of restricted stock units granted to senior management and those granted to all other employees. Restricted stock units generally vest in fourths on the first, second, third and fourth anniversary of the grant date.

As of December 31, 2021, there was $7.1 million of unrecognized compensation cost attributable to our restricted stock units. We expect to recognize this cost over a weighted average period of 2.9 years.

A summary of our restricted stock units is presented below:


	2021	2020	2019
Restricted stock units granted	129,290	171,409	103,634
Weighted average price of restricted stock units granted	$33.59	$22.58	$31.51
Intrinsic value of restricted stock units outstanding (a)	$15,095	$7,801	$3,351
Grant date fair value of restricted stock units vested	493	218	2
Cash used to purchase common shares from current and former employees to pay withholding tax requirements on restricted stock units vested	189	47	1

(a)Intrinsic value of restricted stock units outstanding is based on the market price of the Company’s stock at December 31, 2021.


	2021
	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested Restricted Stock Units at January 1,	265,522	$25.75
Granted	129,290	33.59
Vested	(18,998)	25.94
Cancelled	(1,798)	29.37
Non-vested Restricted Stock Units at December 31,	374,016	$28.44

PERFORMANCE SHARE UNITS

Our 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 our 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 recognized as expense on a straight-line basis over the vesting period. Additionally, we do not estimate a forfeiture rate for non-vested units. As such, unexpected forfeitures will lower stock-based compensation during the period in which they occur.

The Stock Plan allows for the cash settlement of the required withholding tax on performance share unit awards. As of December 31, 2021, there was $5.5 million of unrecognized compensation cost related to our performance share unit awards, which is attributable to awards granted in 2019, 2020 and 2021. This cost is expected to be recognized over a weighted average period of 1.7 years.

A summary of our performance share units is presented below:


	2021	2020	2019
Common shares reserved for performance shares granted during year	191,203	361,870	232,684
Weighted average fair value of performance share units granted	$36.10	$29.59	$35.99
Intrinsic value of outstanding performance share units (a)	$16,360	$11,711	$10,758
Fair value of performance shares vested	1,738	3,522	6,387
Cash used to purchase common shares from current and former employees to pay withholding tax requirements on performance shares vested	559	992	2,639

(a)Intrinsic value of outstanding performance share units is based on the market price of the Company's stock at December 31, 2021.


	2021
	Number of Units	Weighted Average Grant Date Fair Value
Outstanding Performance Share units at January 1,	398,607	$34.17
Granted	109,259	36.10
Units Distributed	(102,505)	40.27

Outstanding Performance Share units at December 31,	405,361	$33.16

Expected volatility was estimated using daily returns on the Company’s common shares for the three-year period ending on the grant date. The risk-free rate was based on the 3-year U.S. Treasury rate on the date of the award. The dividend yield was not used to calculate fair value as awards granted receive dividend equivalents. The following table provides an overview of the assumptions used in calculating the fair value of the awards granted for the three years ended December 31, 2021:


	2021		2020		2019
Expected volatility	35.6	%	32.6	%	18.4	%
Risk-free rate	0.4	%	0.3	%	2.3	%

NON-QUALIFIED EMPLOYEE STOCK OPTIONS

The exercise price of each non-qualified stock option granted under the Stock Plan is equal to the closing market price of the Company’s stock on the grant date. Under the Stock Plan, the maximum term is 10 years from the grant date.

A summary of the status of our stock options as of and for the year ended December 31, 2021 is presented below:


	2021
	Number of Shares	Weighted Average Exercise Price (per common share)	Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Options outstanding at January 1,	340,985	$34.07

Exercised	(186,590)	32.31
Cancelled or expired	(30,225)	34.25
Options outstanding at December 31,	124,170	36.67	1.27	$458
Options exercisable at December 31,	124,170	$36.67	1.27	$458

A summary of additional information pertaining to our stock options is presented below:


	2021	2020	2019
Intrinsic value of options exercised (a)	$916	$108	$475

Cash received from exercise of options	5,922	1,368	1,260

(a)Intrinsic value of options exercised is the amount by which the fair value of the stock on the exercise date exceeded the exercise price of the option.

As of December 31, 2021, compensation cost related to stock options was fully recognized.

INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

Rayonier is a REIT under the Internal Revenue Code and therefore generally does not pay U.S. federal or state income tax. As of December 31, 2021, Rayonier owns a 97.8% interest in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership. The taxable income or loss generated by the Operating Partnership is passed through and reported to its unitholders (including the Company) on a Schedule K-1 for inclusion in each unitholder’s income tax return. Certain operations, including log trading and certain real estate activities, such as the entitlement, development and sale of HBU properties, are conducted through our TRS. The TRS subsidiaries are subject to U.S. federal and state corporate income tax. The New Zealand timber operations are conducted by the New Zealand subsidiary, which is subject to corporate-level tax at 28% in New Zealand and is treated as a partnership for U.S. income tax purposes.

PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS

The provision for income taxes for each of the three years ended December 31 follows:


	2021	2020	2019
Current
U.S. federal	($1,893)	($237)	$2
State	(536)	(339)	(122)
Foreign	(11,425)	(5,391)	(1,542)
	(13,854)	(5,967)	(1,662)
Deferred
U.S. federal	(6,288)	8,355	465
State	(1,623)	325	17
Foreign	(2,007)	(3,027)	(11,278)
	(9,918)	5,653	(10,796)
Changes in valuation allowance	9,111	(6,695)	(482)
Total	($14,661)	($7,009)	($12,940)

A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate for each of the three years ended December 31 follows:


	2021			2020			2019
U.S. federal statutory income tax rate	($47,280)	(21.0)	%	($7,726)	(21.0)	%	($16,930)	(21.0)	%
U.S. and foreign REIT income	44,316	19.7		16,569	45.0		19,902	24.7
Matariki Group and Rayonier New Zealand Ltd	(12,927)	(5.7)		(7,698)	(20.8)		(11,181)	(13.9)

Change in valuation allowance	9,111	4.0		(6,695)	(18.2)		(482)	(0.6)
REIT Built-in Gain	(2,215)	(1.0)		—	—		—	—
State Net Operating Loss	—	—		1,118	3.0		—	—
Prepaid land sales	—	—		(1,084)	(2.9)		—	—




Internal transfer of assets deferred	—	—		—	—		(1,815)	(2.3)

Foreign income tax withholding	(505)	(0.2)		(721)	(2.0)		(1,535)	(1.9)
Sale of Timber Funds	(2,399)	(1.1)		—	—		—	—
Other	(2,762)	(1.2)		(772)	(2.1)		(899)	(1.1)
Income tax expense as reported for net income	($14,661)	(6.5)	%	($7,009)	(19.0)	%	($12,940)	(16.1)	%

The Company’s effective tax rate is below the 21 percent U.S. statutory rate primarily due to tax benefits associated with being a REIT.

DEFERRED TAXES

Deferred income taxes result from differences between the timing of recognizing revenues and expenses for financial book purposes versus income tax purposes. The nature of the temporary differences and the resulting net deferred tax asset/liability for the two years ended December 31 follows:


	2021	2020
Gross deferred tax assets:
Pension, postretirement and other employee benefits	$597	$1,403
New Zealand subsidiary	21,790	23,461
CBPC tax credit carry forwards	13,701	14,555
Capitalized real estate costs	1,656	1,459
U.S. TRS net operating loss	12,489	18,363
Land basis difference	9,061	9,468
Other	5,367	5,502
Total gross deferred tax assets	64,661	74,211
Less: Valuation allowance	(36,904)	(46,015)
Total deferred tax assets after valuation allowance	$27,757	$28,196
Gross deferred tax liabilities:
Accelerated depreciation	(46)	(38)

New Zealand subsidiary	(91,388)	(98,245)


Other	(6,059)	(4,884)
Total gross deferred tax liabilities	(97,493)	(103,167)
Net deferred tax liability reported as noncurrent	($69,736)	($74,971)

Net operating loss (“NOL”) and tax credit carryforwards as of the two years ended December 31 follows:


	Tax Effected Balance	Expiration
2021


U.S. Federal NOL Carryforwards- Post TCJA (a)	$10,687	None
U.S State NOL Carryforwards (b)	1,802	2033
Cellulosic Biofuel Producer Credit (c)	13,701	2023


2020

U.S. Federal NOL Carryforwards- Pre TCJA (a)	$2,363	2036
U.S. Federal NOL Carryforwards- Post TCJA (a)	13,017	None
U.S State NOL Carryforwards (b)	2,983	2031
Cellulosic Biofuel Producer Credit (c)	14,555	2023

(a)The Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017. The TCJA lifted the 20-year federal NOL Carryforward period. Net operating losses generated after December 31, 2017 have an indefinite carryforward period.

(b)The U.S. state NOL is made up of several jurisdictions that expire in various future years. As of December 31, 2021, no state NOL is set to expire before December 31, 2033. As of December 31, 2020, no state NOL was set to expire before December 31, 2031.

(c)The Further Consolidated Appropriations Act, 2020 was signed into law on December 20, 2019. The Further Consolidated Appropriations Act, 2020 included the Taxpayer Certainty and Disaster Relief Act of 2019 (Tax Extenders Act), which temporarily renewed approximately two dozen credits that previously expired or were set to expire at the end of 2019. The Cellulosic Biofuel Producer Credit was one of the credits extended under this act.

We record a valuation allowance to reduce the carrying amounts of deferred tax assets if it is more likely than not that such deferred tax assets will not be realized. Since 2015, we have had a 100% valuation allowance against the U.S. taxable REIT subsidiary's deferred tax assets, net of deferred tax liabilities. During 2021, the net deferred tax assets decreased by $9.1 million. As a result, we recorded a change in the valuation allowance of $9.1 million related to the U.S. TRS's deferred tax assets, net of liabilities.

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 Years
U.S. Internal Revenue Service			2018 - 2020
New Zealand Inland Revenue			2016 - 2020

TAX CHARACTERISTICS OF DIVIDEND DISTRIBUTIONS

The taxable nature of the dividend distributions paid for each of the three years ended December 31 follows:


	2021		2020		2019
Total dividends/distributions paid per common share/unit	$1.08		$1.08		$1.08
Tax characteristics:
Capital gain	100	%	100	%	100	%

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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