x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Item
|
|
|
Page
|
|
|
PART I - FINANCIAL INFORMATION
|
|
1.
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
2.
|
|
||
3.
|
|
||
4.
|
|
||
|
|
PART II - OTHER INFORMATION
|
|
1.
|
|
||
6.
|
|
||
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
ASSETS
|
|||||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
222,061
|
|
|
$
|
199,644
|
|
Restricted cash
|
75,000
|
|
|
—
|
|
||
Accounts receivable, less allowance for doubtful accounts of $622 and $673
|
19,765
|
|
|
94,956
|
|
||
Inventory
|
|
|
|
||||
Finished goods
|
17,622
|
|
|
115,270
|
|
||
Work in progress
|
—
|
|
|
3,555
|
|
||
Raw materials
|
862
|
|
|
17,661
|
|
||
Manufacturing and maintenance supplies
|
—
|
|
|
2,332
|
|
||
Total inventory
|
18,484
|
|
|
138,818
|
|
||
Deferred tax assets
|
3,221
|
|
|
39,100
|
|
||
Prepaid and other current assets
|
21,565
|
|
|
46,576
|
|
||
Total current assets
|
360,096
|
|
|
519,094
|
|
||
TIMBER AND TIMBERLANDS, NET OF DEPLETION AND AMORTIZATION
|
2,121,614
|
|
|
2,049,378
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
||||
Land
|
1,833
|
|
|
20,138
|
|
||
Buildings
|
8,468
|
|
|
180,573
|
|
||
Machinery and equipment
|
3,333
|
|
|
1,760,641
|
|
||
Construction in progress
|
274
|
|
|
19,795
|
|
||
Total property, plant and equipment, gross
|
13,908
|
|
|
1,981,147
|
|
||
Less — accumulated depreciation
|
(7,765
|
)
|
|
(1,120,326
|
)
|
||
Total property, plant and equipment, net
|
6,143
|
|
|
860,821
|
|
||
OTHER ASSETS
|
148,104
|
|
|
256,208
|
|
||
TOTAL ASSETS
|
$
|
2,635,957
|
|
|
$
|
3,685,501
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
CURRENT LIABILITIES
|
|
|
|
||||
Accounts payable
|
$
|
27,871
|
|
|
$
|
69,293
|
|
Current maturities of long-term debt
|
—
|
|
|
112,500
|
|
||
Accrued taxes
|
13,834
|
|
|
8,551
|
|
||
Uncertain tax positions
|
5,780
|
|
|
10,547
|
|
||
Accrued payroll and benefits
|
5,316
|
|
|
24,948
|
|
||
Accrued interest
|
9,743
|
|
|
9,531
|
|
||
Accrued customer incentives
|
—
|
|
|
9,580
|
|
||
Other current liabilities
|
28,865
|
|
|
24,327
|
|
||
Current liabilities for dispositions and discontinued operations (Note 13)
|
—
|
|
|
6,835
|
|
||
Total current liabilities
|
91,409
|
|
|
276,112
|
|
||
LONG-TERM DEBT
|
770,086
|
|
|
1,461,724
|
|
||
NON-CURRENT LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS (Note 13)
|
—
|
|
|
69,543
|
|
||
PENSION AND OTHER POSTRETIREMENT BENEFITS (Note 16)
|
24,014
|
|
|
95,654
|
|
||
OTHER NON-CURRENT LIABILITIES
|
30,600
|
|
|
27,225
|
|
||
COMMITMENTS AND CONTINGENCIES (Notes 12 and 14)
|
|
|
|
||||
SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Common Shares, 480,000,000 shares authorized, 126,529,693 and 126,257,870 shares issued and outstanding
|
698,462
|
|
|
692,100
|
|
||
Retained earnings
|
891,629
|
|
|
1,015,209
|
|
||
Accumulated other comprehensive income (loss)
|
30,891
|
|
|
(46,139
|
)
|
||
TOTAL RAYONIER INC. SHAREHOLDERS’ EQUITY
|
1,620,982
|
|
|
1,661,170
|
|
||
Noncontrolling interest
|
98,866
|
|
|
94,073
|
|
||
TOTAL SHAREHOLDERS’ EQUITY
|
1,719,848
|
|
|
1,755,243
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
2,635,957
|
|
|
$
|
3,685,501
|
|
|
Six Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
61,432
|
|
|
$
|
235,626
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
54,452
|
|
|
50,857
|
|
||
Non-cash cost of real estate sold
|
3,302
|
|
|
2,593
|
|
||
Stock-based incentive compensation expense
|
5,980
|
|
|
6,226
|
|
||
Deferred income taxes
|
10,103
|
|
|
38,107
|
|
||
Tax benefit of AFMC for CBPC exchange
|
—
|
|
|
(18,761
|
)
|
||
Depreciation and amortization from discontinued operations
|
37,985
|
|
|
29,356
|
|
||
Amortization of losses from pension and postretirement plans
|
5,896
|
|
|
11,617
|
|
||
Gain on sale of discontinued operations, net
|
—
|
|
|
(42,670
|
)
|
||
Gain related to consolidation of New Zealand joint venture
|
—
|
|
|
(16,098
|
)
|
||
Other
|
(43
|
)
|
|
(8,653
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
9,988
|
|
|
(11,782
|
)
|
||
Inventories
|
4,765
|
|
|
27,325
|
|
||
Accounts payable
|
27,307
|
|
|
19,535
|
|
||
Income tax receivable/payable
|
5,195
|
|
|
(5,626
|
)
|
||
All other operating activities
|
5,130
|
|
|
(7,654
|
)
|
||
Payment to exchange AFMC for CBPC
|
—
|
|
|
(70,311
|
)
|
||
Expenditures for dispositions and discontinued operations
|
(5,096
|
)
|
|
(4,015
|
)
|
||
CASH PROVIDED BY OPERATING ACTIVITIES
|
226,396
|
|
|
235,672
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(80,494
|
)
|
|
(74,587
|
)
|
||
Purchase of additional interest in New Zealand joint venture
|
—
|
|
|
(139,879
|
)
|
||
Purchase of timberlands
|
(74,817
|
)
|
|
(10,447
|
)
|
||
Jesup mill cellulose specialties expansion (gross purchases of $0 and $114,449, net of purchases on account of $0 and $14,264)
|
—
|
|
|
(100,185
|
)
|
||
Proceeds from disposition of Wood Products business
|
—
|
|
|
72,953
|
|
||
Change in restricted cash
|
63,128
|
|
|
7,603
|
|
||
Other
|
(478
|
)
|
|
537
|
|
||
CASH USED FOR INVESTING ACTIVITIES
|
(92,661
|
)
|
|
(244,005
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Issuance of debt
|
1,238,389
|
|
|
455,000
|
|
||
Repayment of debt
|
(1,107,062
|
)
|
|
(273,087
|
)
|
||
Dividends paid
|
(124,628
|
)
|
|
(113,222
|
)
|
||
Proceeds from the issuance of common shares
|
3,347
|
|
|
6,643
|
|
||
Excess tax benefits on stock-based compensation
|
—
|
|
|
7,399
|
|
||
Repurchase of common shares
|
(1,834
|
)
|
|
(11,241
|
)
|
||
Debt issuance costs
|
(12,380
|
)
|
|
—
|
|
||
Purchase of timberland deeds for Rayonier Advanced Materials
|
(12,677
|
)
|
|
—
|
|
||
Debt issuance funds distributed to Rayonier Advanced Materials
|
(924,943
|
)
|
|
—
|
|
||
Proceeds from spin-off of Rayonier Advanced Materials
|
906,200
|
|
|
—
|
|
||
Change in restricted cash reserved for dividends
|
(75,000
|
)
|
|
—
|
|
||
Other
|
(680
|
)
|
|
—
|
|
||
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES
|
(111,268
|
)
|
|
71,492
|
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(50
|
)
|
|
(174
|
)
|
||
CASH AND CASH EQUIVALENTS
|
|
|
|
||||
Change in cash and cash equivalents
|
22,417
|
|
|
62,985
|
|
||
Balance, beginning of year
|
199,644
|
|
|
280,596
|
|
||
Balance, end of period
|
$
|
222,061
|
|
|
$
|
343,581
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
||||
Cash paid during the period:
|
|
|
|
||||
Interest
|
$
|
26,980
|
|
|
$
|
16,754
|
|
Income taxes
|
10,417
|
|
|
84,508
|
|
||
Non-cash investing activity:
|
|
|
|
||||
Capital assets purchased on account
|
11,547
|
|
|
59,729
|
|
||
Non-cash financing activity:
|
|
|
|
||||
Shareholder debt assumed in acquisition of New Zealand joint venture
|
—
|
|
|
125,532
|
|
||
Conversion of shareholder debt to equity noncontrolling interest
|
—
|
|
|
(95,961
|
)
|
1.
|
BASIS OF PRESENTATION
|
2.
|
DISCONTINUED OPERATIONS
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Sales
|
$
|
212,680
|
|
|
$
|
254,189
|
|
|
$
|
456,180
|
|
|
$
|
540,855
|
|
Cost of sales and other
|
(174,961
|
)
|
|
(174,650
|
)
|
|
(368,868
|
)
|
|
(366,584
|
)
|
||||
Transaction expenses
|
(19,669
|
)
|
|
(102
|
)
|
|
(22,989
|
)
|
|
(186
|
)
|
||||
Income from discontinued operations before income taxes
|
18,050
|
|
|
79,437
|
|
|
64,323
|
|
|
174,085
|
|
||||
Income tax expense
|
(5,966
|
)
|
|
(31,177
|
)
|
|
(21,231
|
)
|
|
(41,595
|
)
|
||||
Income from discontinued operations, net
|
$
|
12,084
|
|
|
$
|
48,260
|
|
|
$
|
43,092
|
|
|
$
|
132,490
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Interest allocated to the Performance Fibers business
|
$
|
(1,910
|
)
|
|
$
|
(1,851
|
)
|
|
$
|
(4,205
|
)
|
|
$
|
(3,797
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Depreciation and amortization
|
$
|
17,336
|
|
|
$
|
13,649
|
|
|
$
|
37,985
|
|
|
$
|
28,802
|
|
Capital expenditures
|
24,621
|
|
|
48,817
|
|
|
46,336
|
|
|
70,182
|
|
||||
Jesup mill cellulose specialties expansion
|
—
|
|
|
63,451
|
|
|
—
|
|
|
100,185
|
|
|
June 27, 2014
|
||
Accounts receivable, net
|
$
|
66,050
|
|
Inventory
|
121,705
|
|
|
Prepaid and other current assets
|
70,092
|
|
|
Property, plant and equipment, net
|
862,487
|
|
|
Other assets
|
103,400
|
|
|
Total assets
|
$
|
1,223,734
|
|
|
|
||
Accounts payable
|
65,522
|
|
|
Other current liabilities
|
51,006
|
|
|
Long-Term debt
|
950,000
|
|
|
Non-current environmental liabilities
|
66,434
|
|
|
Pension and other postretirement benefits
|
102,633
|
|
|
Other non-current liabilities
|
7,269
|
|
|
Deficit
|
(19,130
|
)
|
|
Total liabilities and equity
|
$
|
1,223,734
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Hardwood purchases
|
$
|
1,190
|
|
|
$
|
350
|
|
|
$
|
3,935
|
|
|
$
|
259
|
|
|
Six Months Ended
|
||
|
June 30, 2013
|
||
Sales
|
$
|
16,968
|
|
Cost of sales and other
|
(14,258
|
)
|
|
Gain on sale of discontinued operations
|
64,040
|
|
|
Income from discontinued operations before income taxes
|
$
|
66,750
|
|
Income tax expense
|
(22,273
|
)
|
|
Income from discontinued operations, net
|
$
|
44,477
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Performance Fibers income from discontinued operations, net
|
$
|
12,084
|
|
|
$
|
48,260
|
|
|
$
|
43,092
|
|
|
$
|
132,490
|
|
Wood Products income from discontinued operations, net
|
—
|
|
|
—
|
|
|
—
|
|
|
44,477
|
|
||||
Income from discontinued operations, net
|
$
|
12,084
|
|
|
$
|
48,260
|
|
|
$
|
43,092
|
|
|
$
|
176,967
|
|
3.
|
EARNINGS PER COMMON SHARE
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Income from continuing operations
|
$
|
6,056
|
|
|
$
|
39,631
|
|
|
$
|
18,340
|
|
|
$
|
58,659
|
|
Less: Net (loss) income from continuing operations attributable to noncontrolling interest
|
(245
|
)
|
|
727
|
|
|
(328
|
)
|
|
727
|
|
||||
Income from continuing operations attributable to Rayonier Inc.
|
$
|
6,301
|
|
|
$
|
38,904
|
|
|
$
|
18,668
|
|
|
$
|
57,932
|
|
|
|
|
|
|
|
|
|
||||||||
Income from discontinued operations, net, attributable to Rayonier Inc.
|
$
|
12,084
|
|
|
$
|
48,260
|
|
|
$
|
43,092
|
|
|
$
|
176,967
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Rayonier Inc.
|
$
|
18,385
|
|
|
$
|
87,164
|
|
|
$
|
61,760
|
|
|
$
|
234,899
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used for determining basic earnings per common share
|
126,434,376
|
|
|
126,027,297
|
|
|
126,390,891
|
|
|
125,257,876
|
|
||||
Dilutive effect of:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
293,213
|
|
|
504,321
|
|
|
296,768
|
|
|
519,014
|
|
||||
Performance and restricted shares
|
201,956
|
|
|
386,228
|
|
|
194,995
|
|
|
384,910
|
|
||||
Assumed conversion of Senior Exchangeable Notes (a)
|
2,631,514
|
|
|
2,217,058
|
|
|
2,579,402
|
|
|
2,173,658
|
|
||||
Assumed conversion of warrants (a) (b)
|
2,738,606
|
|
|
1,632,345
|
|
|
2,656,633
|
|
|
2,250,361
|
|
||||
Shares used for determining diluted earnings per common share
|
132,299,665
|
|
|
130,767,249
|
|
|
132,118,689
|
|
|
130,585,819
|
|
||||
Basic earnings per common share attributable to Rayonier Inc.:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.05
|
|
|
$
|
0.31
|
|
|
$
|
0.15
|
|
|
$
|
0.46
|
|
Discontinued operations
|
0.10
|
|
|
0.38
|
|
|
0.34
|
|
|
1.42
|
|
||||
Net income
|
$
|
0.15
|
|
|
$
|
0.69
|
|
|
$
|
0.49
|
|
|
$
|
1.88
|
|
Diluted earnings per common share attributable to Rayonier Inc.:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.05
|
|
|
$
|
0.30
|
|
|
$
|
0.14
|
|
|
$
|
0.44
|
|
Discontinued operations
|
0.09
|
|
|
0.37
|
|
|
0.33
|
|
|
1.36
|
|
||||
Net income
|
$
|
0.14
|
|
|
$
|
0.67
|
|
|
$
|
0.47
|
|
|
$
|
1.80
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Anti-dilutive shares excluded from the computations of diluted earnings per share:
|
|
|
|
|
|
|
|
||||
Stock options, performance and restricted shares
|
507,044
|
|
|
199,245
|
|
|
499,193
|
|
|
207,097
|
|
Assumed conversion of exchangeable note hedges (a)
|
2,631,514
|
|
|
2,217,058
|
|
|
2,579,402
|
|
|
2,173,658
|
|
Total
|
3,138,558
|
|
|
2,416,303
|
|
|
3,078,595
|
|
|
2,380,755
|
|
4.
|
INCOME TAXES
|
|
Three Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
||||||||||
Income tax expense at federal statutory rate
|
$
|
6,850
|
|
|
35.0
|
%
|
|
$
|
8,289
|
|
|
35.0
|
%
|
REIT income and taxable losses
|
(7,382
|
)
|
|
(37.7
|
)
|
|
(20,001
|
)
|
|
(84.4
|
)
|
||
Reverse loss on FMV of exchangeable notes
|
—
|
|
|
—
|
|
|
828
|
|
|
3.5
|
|
||
Foreign operations
|
(688
|
)
|
|
(3.5
|
)
|
|
458
|
|
|
1.9
|
|
||
Non-deductible real estate losses
|
558
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
||
Other
|
112
|
|
|
0.6
|
|
|
115
|
|
|
0.5
|
|
||
Income tax benefit before discrete items
|
(550
|
)
|
|
(2.8
|
)%
|
|
(10,311
|
)
|
|
(43.5
|
)%
|
||
CBPC valuation allowance
|
15,574
|
|
|
79.7
|
|
|
—
|
|
|
—
|
|
||
Spin-off related costs
|
797
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
||
Deferred tax inventory valuations
|
(3,293
|
)
|
|
(16.8
|
)
|
|
—
|
|
|
—
|
|
||
Gain related to consolidation of New Zealand joint venture
|
—
|
|
|
—
|
|
|
(5,636
|
)
|
|
(23.8
|
)
|
||
Other
|
987
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
||
Income tax expense (benefit) as reported for continuing operations
|
$
|
13,515
|
|
|
69.1
|
%
|
|
$
|
(15,947
|
)
|
|
(67.3
|
)%
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
||||||||||
Income tax expense at federal statutory rate
|
$
|
8,498
|
|
|
35.0
|
%
|
|
$
|
12,851
|
|
|
35.0
|
%
|
REIT income and taxable losses
|
(15,230
|
)
|
|
(62.7
|
)
|
|
(31,324
|
)
|
|
(85.3
|
)
|
||
Foreign operations
|
(854
|
)
|
|
(3.5
|
)
|
|
1,517
|
|
|
4.1
|
|
||
Non-deductible real estate losses
|
692
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
||
Reverse loss on FMV of exchangeable notes
|
—
|
|
|
—
|
|
|
1,284
|
|
|
3.5
|
|
||
Other
|
139
|
|
|
0.6
|
|
|
(151
|
)
|
|
(0.4
|
)
|
||
Income tax benefit before discrete items
|
(6,755
|
)
|
|
(27.8
|
)%
|
|
(15,823
|
)
|
|
(43.1
|
)%
|
||
CBPC valuation allowance
|
15,574
|
|
|
64.1
|
|
|
—
|
|
|
—
|
|
||
Spin-off related costs
|
797
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
||
Deferred tax inventory valuations
|
(3,293
|
)
|
|
(13.6
|
)
|
|
—
|
|
|
—
|
|
||
Gain related to consolidation of New Zealand joint venture
|
—
|
|
|
—
|
|
|
(5,636
|
)
|
|
(15.3
|
)
|
||
Other
|
(384
|
)
|
|
(1.5
|
)
|
|
(483
|
)
|
|
(1.4
|
)
|
||
Income tax expense (benefit) as reported for continuing operations
|
$
|
5,939
|
|
|
24.5
|
%
|
|
$
|
(21,942
|
)
|
|
(59.8
|
)%
|
|
|
|
|
|
|
|
|
5.
|
RESTRICTED CASH AND DEPOSITS
|
6.
|
JOINT VENTURE INVESTMENT
|
|
Three Months Ended June 30, 2013
|
|
Six Months Ended June 30, 2013
|
||||
Sales
|
$
|
409,077
|
|
|
$
|
837,322
|
|
Net Income
|
$
|
87,891
|
|
|
$
|
233,867
|
|
7.
|
SHAREHOLDERS’ EQUITY
|
|
Rayonier Inc. Shareholders Equity
|
|
|
|
|
|||||||||||||||||
|
Common Shares
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Income/(Loss)
|
|
Non-controlling Interest
|
|
Total Shareholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance, December 31, 2012
|
123,332,444
|
|
|
$
|
670,749
|
|
|
$
|
876,634
|
|
|
$
|
(109,379
|
)
|
|
$
|
—
|
|
|
$
|
1,438,004
|
|
Net income
|
—
|
|
|
—
|
|
|
371,896
|
|
|
—
|
|
|
1,902
|
|
|
373,798
|
|
|||||
Dividends ($1.86 per share)
|
—
|
|
|
—
|
|
|
(233,321
|
)
|
|
—
|
|
|
—
|
|
|
(233,321
|
)
|
|||||
Issuance of shares under incentive stock plans
|
1,001,426
|
|
|
10,101
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,101
|
|
|||||
Stock-based compensation
|
—
|
|
|
11,710
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,710
|
|
|||||
Excess tax benefit on stock-based compensation
|
—
|
|
|
8,413
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,413
|
|
|||||
Repurchase of common shares
|
(211,221
|
)
|
|
(11,326
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,326
|
)
|
|||||
Equity portion of convertible debt upon redemption
|
—
|
|
|
2,453
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,453
|
|
|||||
Settlement of warrants
|
2,135,221
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net gain from pension and postretirement plans
|
—
|
|
|
—
|
|
|
—
|
|
|
61,869
|
|
|
—
|
|
|
61,869
|
|
|||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,336
|
|
|
96,336
|
|
|||||
Noncontrolling interest redemption of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(713
|
)
|
|
(713
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,915
|
)
|
|
(3,795
|
)
|
|
(5,710
|
)
|
|||||
Joint venture cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
3,286
|
|
|
343
|
|
|
3,629
|
|
|||||
Balance, December 31, 2013
|
126,257,870
|
|
|
$
|
692,100
|
|
|
$
|
1,015,209
|
|
|
$
|
(46,139
|
)
|
|
$
|
94,073
|
|
|
$
|
1,755,243
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
61,760
|
|
|
—
|
|
|
(328
|
)
|
|
61,432
|
|
|||||
Dividends ($0.98 per share)
|
—
|
|
|
—
|
|
|
(123,947
|
)
|
|
—
|
|
|
—
|
|
|
(123,947
|
)
|
|||||
Contribution to Rayonier Advanced Materials
|
—
|
|
|
(301
|
)
|
|
(61,393
|
)
|
|
80,749
|
|
|
—
|
|
|
19,055
|
|
|||||
Issuance of shares under incentive stock plans
|
315,739
|
|
|
3,347
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,347
|
|
|||||
Stock-based compensation
|
—
|
|
|
5,980
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,980
|
|
|||||
Excess tax deficiency on stock-based compensation
|
—
|
|
|
(830
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(830
|
)
|
|||||
Repurchase of common shares
|
(43,916
|
)
|
|
(1,834
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,834
|
)
|
|||||
Net losses from pension and postretirement plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,779
|
)
|
|
—
|
|
|
(19,779
|
)
|
|||||
Noncontrolling interest redemption of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(930
|
)
|
|
(930
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
15,546
|
|
|
5,774
|
|
|
21,320
|
|
|||||
Joint venture cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
514
|
|
|
277
|
|
|
791
|
|
|||||
Balance, June 30, 2014
|
126,529,693
|
|
|
$
|
698,462
|
|
|
$
|
891,629
|
|
|
$
|
30,891
|
|
|
$
|
98,866
|
|
|
$
|
1,719,848
|
|
8.
|
SEGMENT AND GEOGRAPHICAL INFORMATION
|
|
June 30,
|
|
December 31,
|
||||
ASSETS
|
2014
|
|
2013
|
||||
Forest Resources
|
$
|
2,288,157
|
|
|
$
|
2,162,913
|
|
Real Estate
|
96,277
|
|
|
149,001
|
|
||
Other Operations
|
24,860
|
|
|
37,334
|
|
||
Corporate and other
|
226,663
|
|
|
257,608
|
|
||
Performance Fibers
|
—
|
|
|
1,078,645
|
|
||
Total
|
$
|
2,635,957
|
|
|
$
|
3,685,501
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
SALES
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Forest Resources
|
$
|
101,120
|
|
|
$
|
109,060
|
|
|
$
|
205,799
|
|
|
$
|
166,162
|
|
Real Estate
|
34,017
|
|
|
13,376
|
|
|
39,547
|
|
|
37,673
|
|
||||
Other Operations
|
29,224
|
|
|
32,709
|
|
|
64,910
|
|
|
58,458
|
|
||||
Intersegment Eliminations
|
(1,216
|
)
|
|
(256
|
)
|
|
(3,924
|
)
|
|
(351
|
)
|
||||
Total
|
$
|
163,145
|
|
|
$
|
154,889
|
|
|
$
|
306,332
|
|
|
$
|
261,942
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
OPERATING INCOME
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Forest Resources
|
$
|
21,578
|
|
|
$
|
20,890
|
|
|
$
|
49,079
|
|
|
$
|
34,145
|
|
Real Estate
|
28,096
|
|
|
6,105
|
|
|
28,836
|
|
|
22,947
|
|
||||
Other Operations
|
(132
|
)
|
|
1,621
|
|
|
(544
|
)
|
|
1,719
|
|
||||
Corporate and other (a)
|
(9,974
|
)
|
|
3,735
|
|
|
(21,409
|
)
|
|
(5,057
|
)
|
||||
Total
|
$
|
39,568
|
|
|
$
|
32,351
|
|
|
$
|
55,962
|
|
|
$
|
53,754
|
|
(a)
|
The three and six months ended June 30, 2013 included a
$16.1 million
gain related to the consolidation of the New Zealand JV.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
DEPRECIATION, DEPLETION AND AMORTIZATION
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Forest Resources
|
$
|
21,911
|
|
|
$
|
27,291
|
|
|
$
|
46,843
|
|
|
$
|
43,735
|
|
Real Estate
|
6,090
|
|
|
2,469
|
|
|
6,986
|
|
|
6,646
|
|
||||
Corporate
|
341
|
|
|
293
|
|
|
623
|
|
|
476
|
|
||||
Total
|
$
|
28,342
|
|
|
$
|
30,053
|
|
|
$
|
54,452
|
|
|
$
|
50,857
|
|
9.
|
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
|
|
|
|
Three Months Ended June 30,
|
||||||
|
Income Statement Location
|
|
2014
|
|
2013
|
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
Other comprehensive income (loss)
|
|
$
|
(818
|
)
|
|
$
|
(1,509
|
)
|
Foreign currency option contracts
|
Other comprehensive income (loss)
|
|
(504
|
)
|
|
(363
|
)
|
||
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|||||
Foreign currency exchange contracts
|
Other operating expense (income)
|
|
$
|
—
|
|
|
$
|
456
|
|
Foreign currency option contracts
|
Other operating expense (income)
|
|
—
|
|
|
1,491
|
|
||
Interest rate swaps
|
Interest and miscellaneous (expense) income, net
|
|
(729
|
)
|
|
2,650
|
|
||
Fuel hedge contracts
|
Cost of sales (benefit)
|
|
(92
|
)
|
|
(148
|
)
|
|
|
|
Six Months Ended June 30,
|
||||||
|
Income Statement Location
|
|
2014
|
|
2013
|
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
Other comprehensive income (loss)
|
|
$
|
669
|
|
|
$
|
(1,509
|
)
|
Foreign currency option contracts
|
Other comprehensive income (loss)
|
|
221
|
|
|
(363
|
)
|
||
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|||||
Foreign currency exchange contracts
|
Other operating expense (income)
|
|
$
|
25
|
|
|
$
|
(1,426
|
)
|
Foreign currency option contracts
|
Other operating expense (income)
|
|
7
|
|
|
1,491
|
|
||
Interest rate swaps
|
Interest and miscellaneous (expense) income, net
|
|
(1,862
|
)
|
|
2,650
|
|
||
Fuel hedge contracts
|
Cost of sales (benefit)
|
|
225
|
|
|
(148
|
)
|
|
Notional Amount (a)
|
||||||
|
June 30, 2014
|
|
December 31, 2013
|
||||
Derivatives designated as cash flow hedges:
|
|
|
|
||||
Foreign currency exchange contracts
|
$
|
19,625
|
|
|
$
|
32,300
|
|
Foreign currency option contracts
|
46,000
|
|
|
38,000
|
|
||
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
||||
Foreign currency exchange contracts
|
$
|
—
|
|
|
$
|
1,950
|
|
Foreign currency option contracts
|
—
|
|
|
4,000
|
|
||
Interest rate swaps
|
180,658
|
|
|
183,851
|
|
||
Fuel hedge contracts
|
13
|
|
|
38
|
|
(a)
|
All notional amounts are stated in thousands of dollars except fuel contracts which are denominated in thousands of barrels.
|
|
Location on Balance Sheet
|
|
Fair Value Assets (Liabilities) (a)
|
||||||
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
Prepaid and other current assets
|
|
$
|
1,726
|
|
|
$
|
915
|
|
Foreign currency option contracts
|
Prepaid and other current assets
|
|
846
|
|
|
673
|
|
||
|
Other current liabilities
|
|
(100
|
)
|
|
(214
|
)
|
||
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|||||
Foreign currency exchange contracts
|
Prepaid and other current assets
|
|
$
|
—
|
|
|
$
|
25
|
|
Foreign currency option contracts
|
Prepaid and other current assets
|
|
—
|
|
|
8
|
|
||
Interest rate swaps
|
Other non-current liabilities
|
|
(5,051
|
)
|
|
(4,659
|
)
|
||
Fuel hedge contracts
|
Prepaid and other current assets
|
|
—
|
|
|
160
|
|
||
|
Other current liabilities
|
|
(67
|
)
|
|
—
|
|
||
|
|
|
|
|
|
||||
Total derivative contracts:
|
|
|
|
|
|
||||
Prepaid and other current assets
|
|
|
$
|
2,572
|
|
|
$
|
1,781
|
|
|
|
|
|
|
|
||||
Other current liabilities
|
|
|
(167
|
)
|
|
(214
|
)
|
||
Other non-current liabilities
|
|
|
(5,051
|
)
|
|
(4,659
|
)
|
||
Total derivative liabilities
|
|
|
$
|
(5,218
|
)
|
|
$
|
(4,873
|
)
|
(a)
|
See
Note 10
—
Fair Value Measurements
for further information on the fair value of our derivatives including their classification within the fair value hierarchy.
|
10.
|
FAIR VALUE MEASUREMENTS
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
Asset (liability)
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
|
|
Level 1
|
|
Level 2
|
||||||||||||
Cash and cash equivalents
|
$
|
222,061
|
|
|
$
|
222,061
|
|
|
$
|
—
|
|
|
$
|
199,644
|
|
|
$
|
199,644
|
|
|
$
|
—
|
|
Restricted cash (a)
|
80,817
|
|
|
80,817
|
|
|
—
|
|
|
68,944
|
|
|
68,944
|
|
|
—
|
|
||||||
Current maturities of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(112,500
|
)
|
|
—
|
|
|
(119,614
|
)
|
||||||
Long-term debt
|
(770,086
|
)
|
|
—
|
|
|
(840,129
|
)
|
|
(1,461,724
|
)
|
|
—
|
|
|
(1,489,810
|
)
|
||||||
Interest rate swaps (b)
|
(5,051
|
)
|
|
—
|
|
|
(5,051
|
)
|
|
(4,659
|
)
|
|
—
|
|
|
(4,659
|
)
|
||||||
Foreign currency exchange contracts (b)
|
1,726
|
|
|
—
|
|
|
1,726
|
|
|
940
|
|
|
—
|
|
|
940
|
|
||||||
Foreign currency option contracts (b)
|
746
|
|
|
—
|
|
|
746
|
|
|
467
|
|
|
—
|
|
|
467
|
|
||||||
Fuel contracts (b)
|
(67
|
)
|
|
—
|
|
|
(67
|
)
|
|
160
|
|
|
—
|
|
|
160
|
|
(a)
|
Restricted cash of
$6 million
and
$69 million
, as of
June 30, 2014
and
December 31, 2013
, respectively, is recorded in “Other Assets” and represents the proceeds from LKE sales deposited with a third-party intermediary. Restricted cash of
$75 million
as of
June 30, 2014
is recorded in “Restricted cash” and represents the funds restricted to pay dividends or repurchase common stock within
eighteen
months following the spin-off.
|
(b)
|
See
Note 9
—
Derivative Financial Instruments and Hedging Activities
for information regarding the Balance Sheet classification of the Company’s derivative financial instruments.
|
11.
|
GUARANTEES
|
Financial Commitments
|
|
Maximum Potential
Payment
|
|
Carrying Amount
of Associated Liability
|
||||
Standby letters of credit (a)
|
|
$
|
17,355
|
|
|
$
|
15,000
|
|
Guarantees (b)
|
|
2,254
|
|
|
43
|
|
||
Surety bonds (c)
|
|
1,877
|
|
|
—
|
|
||
Total financial commitments
|
|
$
|
21,486
|
|
|
$
|
15,043
|
|
(a)
|
Approximately
$15 million
of the standby letters of credit serve as credit support for industrial revenue bonds. The remaining letters of credit support various insurance related agreements, primarily workers’ compensation, auto liability, and general liability policy requirements. These letters of credit will expire at
various dates during 2014 and 2015
and will be renewed as required.
|
(b)
|
In conjunction with a timberland sale and note monetization in the first quarter of 2004, the Company issued a make-whole agreement pursuant to which it guaranteed
$2.3 million
of obligations of a special-purpose entity that was established to complete the monetization. At
June 30, 2014
, the Company has a
de minimis liability
to reflect the fair market value of its obligation to perform under the make-whole agreement.
|
(c)
|
Rayonier issues surety bonds primarily to secure timber harvesting obligations in the State of Washington. These surety bonds expire at
various dates during 2014 and 2015
and are expected to be renewed as required.
|
12.
|
COMMITMENTS
|
|
Operating
Leases
|
|
Timberland
Leases (a)
|
|
Purchase Obligations (b)
|
|
Total
|
||||||||
2014
|
$
|
1,118
|
|
|
$
|
4,361
|
|
|
$
|
189
|
|
|
$
|
5,668
|
|
2015
|
1,763
|
|
|
10,064
|
|
|
188
|
|
|
12,015
|
|
||||
2016
|
1,285
|
|
|
9,709
|
|
|
638
|
|
|
11,632
|
|
||||
2017
|
646
|
|
|
9,520
|
|
|
188
|
|
|
10,354
|
|
||||
2018
|
400
|
|
|
7,910
|
|
|
2,005
|
|
|
10,315
|
|
||||
Thereafter
|
1,684
|
|
|
142,424
|
|
|
3,110
|
|
|
147,218
|
|
||||
|
$
|
6,896
|
|
|
$
|
183,988
|
|
|
$
|
6,318
|
|
|
$
|
197,202
|
|
|
|
|
|
|
(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)
|
Purchase obligations include payments expected to be made on derivative financial instruments held in New Zealand.
|
13.
|
LIABILITIES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS
|
|
June 30,
|
|
December 31,
|
|
||||
|
2014
|
|
2013
|
|
||||
Balance, beginning of period
|
$
|
76,378
|
|
|
$
|
81,695
|
|
|
Expenditures charged to liabilities
|
(5,096
|
)
|
|
(8,570
|
)
|
|
||
Increase to liabilities
|
2,558
|
|
|
3,253
|
|
|
||
Contribution to Rayonier Advanced Materials
|
(73,840
|
)
|
|
—
|
|
|
||
Balance, end of period
|
—
|
|
|
76,378
|
|
|
||
Less: Current portion
|
—
|
|
|
(6,835
|
)
|
|
||
Non-current portion
|
$
|
—
|
|
|
$
|
69,543
|
|
|
14.
|
CONTINGENCIES
|
15.
|
INCENTIVE STOCK PLANS
|
•
|
Performance share awards granted in 2012 (with a 2012-2014 performance period) continue to be subject to the same performance criteria as applied immediately prior to the spin-off, except that total shareholder return at the end of the performance period will be based on the combined stock prices of Rayonier and Rayonier Advanced Materials and any payment earned will be made in shares of Rayonier common stock and shares of Rayonier Advanced Materials common stock.
|
•
|
Performance share awards granted in 2013 (with a 2013-2015 performance period) were cancelled as of the distribution date and will be replaced with time-vested restricted stock of the post-separation employer of each holder (Rayonier or Rayonier Advanced Materials, as the case may be) that will vest
24
months after the distribution date, generally subject to the holder’s continued employment. The number of shares of time-vested restricted stock granted will be determined in a manner intended to preserve the original value of the performance share award, subject to rounding.
|
•
|
Performance share awards granted in 2014 (with a 2014-2016 performance period) were cancelled and will be replaced with performance share awards of the post-separation employer of each holder (Rayonier or Rayonier Advanced Materials, as the case may be), and will be subject to the achievement of performance criteria that relate to the post-separation business of the applicable employer during a performance period ending December 31, 2016. The number of shares underlying each such performance share award will be determined in a manner intended to preserve the original value of the award, subject to rounding.
|
16.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension
|
Postretirement
|
|||||||||||||
|
Three Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,544
|
|
|
$
|
2,011
|
|
|
$
|
147
|
|
|
$
|
249
|
|
Interest cost
|
4,452
|
|
|
3,953
|
|
|
199
|
|
|
240
|
|
||||
Expected return on plan assets
|
(6,330
|
)
|
|
(5,966
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
277
|
|
|
322
|
|
|
4
|
|
|
6
|
|
||||
Amortization of losses
|
2,603
|
|
|
4,791
|
|
|
116
|
|
|
218
|
|
||||
Amortization of negative plan amendment
|
—
|
|
|
—
|
|
|
(133
|
)
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
2,546
|
|
|
$
|
5,111
|
|
|
$
|
333
|
|
|
$
|
713
|
|
|
Pension
|
|
Postretirement
|
||||||||||||
|
Six Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
3,168
|
|
|
$
|
4,430
|
|
|
$
|
326
|
|
|
$
|
498
|
|
Interest cost
|
9,135
|
|
|
8,787
|
|
|
405
|
|
|
480
|
|
||||
Expected return on plan assets
|
(12,988
|
)
|
|
(13,390
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
569
|
|
|
710
|
|
|
8
|
|
|
13
|
|
||||
Amortization of losses
|
5,340
|
|
|
10,516
|
|
|
245
|
|
|
436
|
|
||||
Amortization of negative plan amendment
|
—
|
|
|
—
|
|
|
(267
|
)
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
5,224
|
|
|
$
|
11,053
|
|
|
$
|
717
|
|
|
$
|
1,427
|
|
|
|
|
|
|
|
|
|
17.
|
DEBT
|
|
June 30, 2014
|
||
Senior Notes due 2022 at a fixed interest rate of 3.75%
|
$
|
325,000
|
|
Senior Exchangeable Notes due 2015 at a fixed interest rate of 4.50% (a)
|
128,706
|
|
|
Mortgage notes due 2017 at fixed interest rates of 4.35% (b)
|
64,863
|
|
|
Solid waste bond due 2020 at a variable interest rate of 1.5% at June 30, 2014
|
15,000
|
|
|
New Zealand JV Revolving Credit Facility due 2016 at a variable interest rate of 3.61% at June 30, 2014
|
205,343
|
|
|
New Zealand JV noncontrolling interest shareholder loan at 0% interest rate
|
31,174
|
|
|
Total Long-term debt
|
$
|
770,086
|
|
(a)
|
The Senior Exchangeable Notes maturing in 2015 were discounted by $
2.3 million
as of
June 30, 2014
. Upon maturity the liability will be $
131 million
.
|
(b)
|
The mortgage notes due in 2017 were recorded at a premium of $
1.9 million
as of
June 30, 2014
. Upon maturity, the liability will be $
63 million
.
|
18.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
|
Foreign currency translation gains
|
|
New Zealand joint venture cash flow hedges
|
|
Unrecognized components of employee benefit plans
|
|
Total
|
||||||||
Balance as of December 31, 2013
|
$
|
36,914
|
|
|
$
|
(342
|
)
|
|
$
|
(82,711
|
)
|
|
$
|
(46,139
|
)
|
Other comprehensive income before reclassifications
|
15,546
|
|
|
2,521
|
|
|
56,044
|
|
(a)
|
74,111
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
(2,007
|
)
|
|
4,926
|
|
(b)
|
2,919
|
|
||||
Net other comprehensive income
|
15,546
|
|
|
514
|
|
|
60,970
|
|
|
77,030
|
|
||||
Balance as of June 30, 2014
|
$
|
52,460
|
|
|
$
|
172
|
|
|
$
|
(21,741
|
)
|
|
$
|
30,891
|
|
(a)
|
Reflects $
81 million
, net of taxes, of additional losses transferred to Rayonier Advanced Materials Pension Plans offset by $
25 million
, net of taxes, of additional losses as a result of the revaluation required due to the spin-off. See
Note 16
—
Employee Benefit Plans
for additional information.
|
(b)
|
This accumulated other comprehensive income component is comprised of $
4 million
in the computation of net periodic pension cost and
$1 million
of recognized deferred tax asset in connection with revaluation and transfer of liabilities as a result of the spin-off.
|
Details about accumulated other comprehensive income components
|
|
Amount reclassified from accumulated other comprehensive income
|
|
Affected line item in the income statement
|
||
Realized gain on foreign currency exchange contracts
|
|
$
|
(2,542
|
)
|
|
Other operating income, net
|
Realized gain on foreign currency option contracts
|
|
(937
|
)
|
|
Other operating income, net
|
|
Noncontrolling interest
|
|
1,218
|
|
|
Comprehensive (income) loss attributable to noncontrolling interest
|
|
Income tax expense on gain from foreign currency contracts
|
|
254
|
|
|
Income tax expense
|
|
Net gain on cash flow hedges reclassified from accumulated other comprehensive income
|
|
(2,007
|
)
|
|
|
|
Income tax expense on pension plan contributed to Rayonier Advanced Materials
|
|
843
|
|
|
Income tax expense
|
|
Net gain reclassified from accumulated other comprehensive income
|
|
$
|
(1,164
|
)
|
|
|
19.
|
OTHER OPERATING INCOME, NET
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Lease income, primarily from hunting leases
|
$
|
3,966
|
|
|
$
|
2,313
|
|
|
$
|
7,003
|
|
|
$
|
4,774
|
|
Other non-timber income
|
133
|
|
|
604
|
|
|
686
|
|
|
1,078
|
|
||||
Foreign currency income (loss)
|
1,232
|
|
|
979
|
|
|
(255
|
)
|
|
795
|
|
||||
(Loss) gain on sale or disposal of property, plant & equipment
|
(20
|
)
|
|
283
|
|
|
(20
|
)
|
|
284
|
|
||||
Loss on foreign currency exchange contracts
|
—
|
|
|
(1,947
|
)
|
|
(32
|
)
|
|
(65
|
)
|
||||
Bankruptcy claim settlement
|
5,779
|
|
|
—
|
|
|
5,779
|
|
|
—
|
|
||||
Miscellaneous income (expense), net
|
299
|
|
|
1,392
|
|
|
(1,397
|
)
|
|
906
|
|
||||
Total
|
$
|
11,389
|
|
|
$
|
3,624
|
|
|
$
|
11,764
|
|
|
$
|
7,772
|
|
20.
|
CONSOLIDATING FINANCIAL STATEMENTS
|
|
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2014
|
||||||||||||||||||||||
|
Rayonier Inc.
(Parent
Guarantor)
|
|
ROC (Subsidiary Guarantor)
|
|
Rayonier TRS
Holdings Inc.
(Issuer)
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||||
SALES
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,145
|
|
|
$
|
—
|
|
|
$
|
163,145
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
121,105
|
|
|
—
|
|
|
121,105
|
|
||||||
Selling and general expenses
|
—
|
|
|
2,394
|
|
|
—
|
|
|
11,467
|
|
|
—
|
|
|
13,861
|
|
||||||
Other operating expense (income), net
|
—
|
|
|
1,573
|
|
|
—
|
|
|
(12,962
|
)
|
|
—
|
|
|
(11,389
|
)
|
||||||
|
—
|
|
|
3,967
|
|
|
—
|
|
|
119,610
|
|
|
—
|
|
|
123,577
|
|
||||||
OPERATING (LOSS) INCOME
|
—
|
|
|
(3,967
|
)
|
|
—
|
|
|
43,535
|
|
|
—
|
|
|
39,568
|
|
||||||
Interest expense
|
(3,196
|
)
|
|
(225
|
)
|
|
(10,982
|
)
|
|
(1,209
|
)
|
|
—
|
|
|
(15,612
|
)
|
||||||
Interest and miscellaneous income (expense), net
|
2,733
|
|
|
(3,003
|
)
|
|
(1,098
|
)
|
|
(3,017
|
)
|
|
—
|
|
|
(4,385
|
)
|
||||||
Equity in income from subsidiaries
|
18,848
|
|
|
25,583
|
|
|
(10,946
|
)
|
|
—
|
|
|
(33,485
|
)
|
|
—
|
|
||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
18,385
|
|
|
18,388
|
|
|
(23,026
|
)
|
|
39,309
|
|
|
(33,485
|
)
|
|
19,571
|
|
||||||
Income tax benefit (expense)
|
—
|
|
|
460
|
|
|
4,409
|
|
|
(18,384
|
)
|
|
—
|
|
|
(13,515
|
)
|
||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
18,385
|
|
|
18,848
|
|
|
(18,617
|
)
|
|
20,925
|
|
|
(33,485
|
)
|
|
6,056
|
|
||||||
DISCONTINUED OPERATIONS, NET
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
12,084
|
|
|
—
|
|
|
12,084
|
|
||||||
NET INCOME (LOSS)
|
18,385
|
|
|
18,848
|
|
|
(18,617
|
)
|
|
33,009
|
|
|
(33,485
|
)
|
|
18,140
|
|
||||||
Less: Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(245
|
)
|
|
—
|
|
|
(245
|
)
|
||||||
NET INCOME (LOSS) ATTRIBUTABLE TO RAYONIER INC.
|
18,385
|
|
|
18,848
|
|
|
(18,617
|
)
|
|
33,254
|
|
|
(33,485
|
)
|
|
18,385
|
|
||||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustment
|
2,653
|
|
|
2,653
|
|
|
513
|
|
|
3,517
|
|
|
(5,819
|
)
|
|
3,517
|
|
||||||
New Zealand joint venture cash flow hedges
|
(598
|
)
|
|
(598
|
)
|
|
(598
|
)
|
|
(920
|
)
|
|
1,794
|
|
|
(920
|
)
|
||||||
Amortization of pension and postretirement plans, net of income tax
|
58,873
|
|
|
58,873
|
|
|
92,714
|
|
|
92,714
|
|
|
(244,301
|
)
|
|
58,873
|
|
||||||
Total other comprehensive income
|
60,928
|
|
|
60,928
|
|
|
92,629
|
|
|
95,311
|
|
|
(248,326
|
)
|
|
61,470
|
|
||||||
COMPREHENSIVE INCOME
|
79,313
|
|
|
79,776
|
|
|
74,012
|
|
|
128,320
|
|
|
(281,811
|
)
|
|
79,610
|
|
||||||
Less: Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|
—
|
|
|
297
|
|
||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.
|
$
|
79,313
|
|
|
$
|
79,776
|
|
|
$
|
74,012
|
|
|
$
|
128,023
|
|
|
$
|
(281,811
|
)
|
|
$
|
79,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2013
|
||||||||||||||||||||||
|
Rayonier Inc.
(Parent
Guarantor
)
|
|
ROC (Subsidiary Guarantor)
|
|
Rayonier TRS
Holdings Inc.
(Issuer)
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||||
SALES
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
154,889
|
|
|
$
|
—
|
|
|
$
|
154,889
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
127,861
|
|
|
—
|
|
|
127,861
|
|
||||||
Selling and general expenses
|
—
|
|
|
2,680
|
|
|
—
|
|
|
12,023
|
|
|
—
|
|
|
14,703
|
|
||||||
Other operating expense (income), net
|
180
|
|
|
(74
|
)
|
|
—
|
|
|
(3,069
|
)
|
|
(661
|
)
|
|
(3,624
|
)
|
||||||
|
180
|
|
|
2,606
|
|
|
—
|
|
|
136,815
|
|
|
(661
|
)
|
|
138,940
|
|
||||||
Equity in income of New Zealand joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
304
|
|
|
—
|
|
|
304
|
|
||||||
OPERATING (LOSS) INCOME BEFORE GAIN ON CONSOLIDATION OF NEW ZEALAND JOINT VENTURE
|
(180
|
)
|
|
(2,606
|
)
|
|
—
|
|
|
18,378
|
|
|
661
|
|
|
16,253
|
|
||||||
Gain related to consolidation of New Zealand joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
16,098
|
|
|
—
|
|
|
16,098
|
|
||||||
OPERATING (LOSS) INCOME
|
(180
|
)
|
|
(2,606
|
)
|
|
—
|
|
|
34,476
|
|
|
661
|
|
|
32,351
|
|
||||||
Interest expense
|
(3,414
|
)
|
|
(266
|
)
|
|
(6,997
|
)
|
|
(674
|
)
|
|
—
|
|
|
(11,351
|
)
|
||||||
Interest and miscellaneous income (expense), net
|
1,759
|
|
|
1,104
|
|
|
(797
|
)
|
|
618
|
|
|
—
|
|
|
2,684
|
|
||||||
Equity in income from subsidiaries
|
89,064
|
|
|
91,235
|
|
|
35,968
|
|
|
—
|
|
|
(216,267
|
)
|
|
—
|
|
||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
87,229
|
|
|
89,467
|
|
|
28,174
|
|
|
34,420
|
|
|
(215,606
|
)
|
|
23,684
|
|
||||||
Income tax (expense) benefit
|
(65
|
)
|
|
(403
|
)
|
|
2,847
|
|
|
13,505
|
|
|
63
|
|
|
15,947
|
|
||||||
INCOME FROM CONTINUING OPERATIONS
|
87,164
|
|
|
89,064
|
|
|
31,021
|
|
|
47,925
|
|
|
(215,543
|
)
|
|
39,631
|
|
||||||
DISCONTINUED OPERATIONS, NET
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
48,260
|
|
|
—
|
|
|
48,260
|
|
||||||
NET INCOME
|
87,164
|
|
|
89,064
|
|
|
31,021
|
|
|
96,185
|
|
|
(215,543
|
)
|
|
87,891
|
|
||||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
727
|
|
|
—
|
|
|
727
|
|
||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC.
|
87,164
|
|
|
89,064
|
|
|
31,021
|
|
|
95,458
|
|
|
(215,543
|
)
|
|
87,164
|
|
||||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustment
|
(18,625
|
)
|
|
(28,201
|
)
|
|
(1,725
|
)
|
|
(18,625
|
)
|
|
38,975
|
|
|
(28,201
|
)
|
||||||
New Zealand joint venture cash flow hedges
|
878
|
|
|
222
|
|
|
(1,873
|
)
|
|
877
|
|
|
118
|
|
|
222
|
|
||||||
Amortization of pension and postretirement plans, net of income tax
|
3,717
|
|
|
3,717
|
|
|
2,819
|
|
|
6,831
|
|
|
(13,367
|
)
|
|
3,717
|
|
||||||
Total other comprehensive loss
|
(14,030
|
)
|
|
(24,262
|
)
|
|
(779
|
)
|
|
(10,917
|
)
|
|
25,726
|
|
|
(24,262
|
)
|
||||||
COMPREHENSIVE INCOME
|
73,134
|
|
|
64,802
|
|
|
30,242
|
|
|
85,268
|
|
|
(189,817
|
)
|
|
63,629
|
|
||||||
Less: Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,505
|
)
|
|
—
|
|
|
(9,505
|
)
|
||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.
|
$
|
73,134
|
|
|
$
|
64,802
|
|
|
$
|
30,242
|
|
|
$
|
94,773
|
|
|
$
|
(189,817
|
)
|
|
$
|
73,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATING STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2014
|
||||||||||||||||||||||
|
Rayonier Inc.
(Parent
Guarantor)
|
|
ROC (Subsidiary Guarantor)
|
|
Rayonier TRS
Holdings Inc.
(Issuer)
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||||
SALES
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
306,332
|
|
|
$
|
—
|
|
|
$
|
306,332
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
235,036
|
|
|
—
|
|
|
235,036
|
|
||||||
Selling and general expenses
|
—
|
|
|
4,544
|
|
|
—
|
|
|
22,554
|
|
|
—
|
|
|
27,098
|
|
||||||
Other operating expense (income), net
|
—
|
|
|
3,948
|
|
|
—
|
|
|
(15,712
|
)
|
|
—
|
|
|
(11,764
|
)
|
||||||
|
—
|
|
|
8,492
|
|
|
—
|
|
|
241,878
|
|
|
—
|
|
|
250,370
|
|
||||||
OPERATING INCOME (LOSS) BEFORE GAIN ON CONSOLIDATION OF NEW ZEALAND JOINT VENTURE
|
—
|
|
|
(8,492
|
)
|
|
—
|
|
|
64,454
|
|
|
—
|
|
|
55,962
|
|
||||||
OPERATING INCOME (LOSS)
|
—
|
|
|
(8,492
|
)
|
|
—
|
|
|
64,454
|
|
|
—
|
|
|
55,962
|
|
||||||
Interest expense
|
(6,389
|
)
|
|
(468
|
)
|
|
(17,672
|
)
|
|
(1,757
|
)
|
|
—
|
|
|
(26,286
|
)
|
||||||
Interest and miscellaneous income (expense), net
|
5,431
|
|
|
(2,189
|
)
|
|
(2,145
|
)
|
|
(6,494
|
)
|
|
—
|
|
|
(5,397
|
)
|
||||||
Equity in income from subsidiaries
|
62,718
|
|
|
74,030
|
|
|
20,164
|
|
|
—
|
|
|
(156,912
|
)
|
|
—
|
|
||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
61,760
|
|
|
62,881
|
|
|
347
|
|
|
56,203
|
|
|
(156,912
|
)
|
|
24,279
|
|
||||||
Income tax benefit (expense)
|
—
|
|
|
(163
|
)
|
|
7,233
|
|
|
(13,009
|
)
|
|
—
|
|
|
(5,939
|
)
|
||||||
INCOME FROM CONTINUING OPERATIONS
|
61,760
|
|
|
62,718
|
|
|
7,580
|
|
|
43,194
|
|
|
(156,912
|
)
|
|
18,340
|
|
||||||
DISCONTINUED OPERATIONS, NET
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from discontinued operations, net of income tax
|
—
|
|
|
—
|
|
|
—
|
|
|
43,092
|
|
|
—
|
|
|
43,092
|
|
||||||
NET INCOME
|
61,760
|
|
|
62,718
|
|
|
7,580
|
|
|
86,286
|
|
|
(156,912
|
)
|
|
61,432
|
|
||||||
Less: Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(328
|
)
|
|
—
|
|
|
(328
|
)
|
||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC.
|
61,760
|
|
|
62,718
|
|
|
7,580
|
|
|
86,614
|
|
|
(156,912
|
)
|
|
61,760
|
|
||||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustment
|
15,547
|
|
|
15,547
|
|
|
1,279
|
|
|
21,312
|
|
|
(32,365
|
)
|
|
21,320
|
|
||||||
New Zealand joint venture cash flow hedges
|
514
|
|
|
514
|
|
|
514
|
|
|
791
|
|
|
(1,542
|
)
|
|
791
|
|
||||||
Amortization of pension and postretirement plans, net of income tax
|
60,970
|
|
|
60,970
|
|
|
94,334
|
|
|
94,334
|
|
|
(249,638
|
)
|
|
60,970
|
|
||||||
Total other comprehensive income
|
77,031
|
|
|
77,031
|
|
|
96,127
|
|
|
116,437
|
|
|
(283,545
|
)
|
|
83,081
|
|
||||||
COMPREHENSIVE INCOME
|
138,791
|
|
|
139,749
|
|
|
103,707
|
|
|
202,723
|
|
|
(440,457
|
)
|
|
144,513
|
|
||||||
Less: Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
5,722
|
|
|
—
|
|
|
5,722
|
|
||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.
|
$
|
138,791
|
|
|
$
|
139,749
|
|
|
$
|
103,707
|
|
|
$
|
197,001
|
|
|
$
|
(440,457
|
)
|
|
$
|
138,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATING STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2013
|
||||||||||||||||||||||
|
Rayonier Inc.
(Parent
Guarantor)
|
|
ROC (Subsidiary Guarantor)
|
|
Rayonier TRS
Holdings Inc.
(Issuer)
|
|
Non-guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||||
SALES
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
261,942
|
|
|
$
|
—
|
|
|
$
|
261,942
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
204,520
|
|
|
—
|
|
|
204,520
|
|
||||||
Selling and general expenses
|
—
|
|
|
5,081
|
|
|
—
|
|
|
23,019
|
|
|
—
|
|
|
28,100
|
|
||||||
Other operating (income) expense, net
|
(1,701
|
)
|
|
449
|
|
|
—
|
|
|
(5,859
|
)
|
|
(661
|
)
|
|
(7,772
|
)
|
||||||
|
(1,701
|
)
|
|
5,530
|
|
|
—
|
|
|
221,680
|
|
|
(661
|
)
|
|
224,848
|
|
||||||
Equity in income of New Zealand joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
562
|
|
|
—
|
|
|
562
|
|
||||||
OPERATING INCOME (LOSS) BEFORE GAIN ON CONSOLIDATION OF NEW ZEALAND JOINT VENTURE
|
1,701
|
|
|
(5,530
|
)
|
|
—
|
|
|
40,824
|
|
|
661
|
|
|
37,656
|
|
||||||
Gain related to consolidation of New Zealand joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
16,098
|
|
|
—
|
|
|
16,098
|
|
||||||
OPERATING INCOME (LOSS)
|
1,701
|
|
|
(5,530
|
)
|
|
—
|
|
|
56,922
|
|
|
661
|
|
|
53,754
|
|
||||||
Interest (expense) income
|
(6,689
|
)
|
|
(518
|
)
|
|
(13,615
|
)
|
|
1,019
|
|
|
—
|
|
|
(19,803
|
)
|
||||||
Interest and miscellaneous income (expense), net
|
4,178
|
|
|
1,633
|
|
|
(1,548
|
)
|
|
(1,497
|
)
|
|
—
|
|
|
2,766
|
|
||||||
Equity in income from subsidiaries
|
235,774
|
|
|
240,000
|
|
|
159,437
|
|
|
—
|
|
|
(635,211
|
)
|
|
—
|
|
||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
234,964
|
|
|
235,585
|
|
|
144,274
|
|
|
56,444
|
|
|
(634,550
|
)
|
|
36,717
|
|
||||||
Income tax (expense) benefit
|
(65
|
)
|
|
189
|
|
|
5,537
|
|
|
16,219
|
|
|
62
|
|
|
21,942
|
|
||||||
INCOME FROM CONTINUING OPERATIONS
|
234,899
|
|
|
235,774
|
|
|
149,811
|
|
|
72,663
|
|
|
(634,488
|
)
|
|
58,659
|
|
||||||
DISCONTINUED OPERATIONS, NET
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
176,967
|
|
|
—
|
|
|
176,967
|
|
||||||
NET INCOME
|
234,899
|
|
|
235,774
|
|
|
149,811
|
|
|
249,630
|
|
|
(634,488
|
)
|
|
235,626
|
|
||||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
727
|
|
|
—
|
|
|
727
|
|
||||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC.
|
234,899
|
|
|
235,774
|
|
|
149,811
|
|
|
248,903
|
|
|
(634,488
|
)
|
|
234,899
|
|
||||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustment
|
(17,650
|
)
|
|
(27,226
|
)
|
|
(1,485
|
)
|
|
(17,650
|
)
|
|
36,785
|
|
|
(27,226
|
)
|
||||||
New Zealand joint venture cash flow hedges
|
1,431
|
|
|
775
|
|
|
(1,873
|
)
|
|
1,431
|
|
|
(989
|
)
|
|
775
|
|
||||||
Amortization of pension and postretirement plans, net of income tax
|
8,687
|
|
|
8,687
|
|
|
6,831
|
|
|
6,831
|
|
|
(22,349
|
)
|
|
8,687
|
|
||||||
Total other comprehensive (loss) income
|
(7,532
|
)
|
|
(17,764
|
)
|
|
3,473
|
|
|
(9,388
|
)
|
|
13,447
|
|
|
(17,764
|
)
|
||||||
COMPREHENSIVE INCOME
|
227,367
|
|
|
218,010
|
|
|
153,284
|
|
|
240,242
|
|
|
(621,041
|
)
|
|
217,862
|
|
||||||
Less: Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,505
|
)
|
|
—
|
|
|
(9,505
|
)
|
||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.
|
$
|
227,367
|
|
|
$
|
218,010
|
|
|
$
|
153,284
|
|
|
$
|
249,747
|
|
|
$
|
(621,041
|
)
|
|
$
|
227,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2014
|
||||||||||||||||||||||
|
Rayonier Inc.
(Parent
Guarantor)
|
|
ROC (Subsidiary Guarantor)
|
|
Rayonier TRS
Holdings Inc.
(Issuer)
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES
|
$
|
138,535
|
|
|
$
|
150,518
|
|
|
$
|
—
|
|
|
$
|
84,350
|
|
|
$
|
(147,007
|
)
|
|
$
|
226,396
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(201
|
)
|
|
—
|
|
|
(80,293
|
)
|
|
—
|
|
|
(80,494
|
)
|
||||||
Purchase of timberlands
|
—
|
|
|
—
|
|
|
—
|
|
|
(74,817
|
)
|
|
—
|
|
|
(74,817
|
)
|
||||||
Change in restricted cash
|
—
|
|
|
—
|
|
|
—
|
|
|
63,128
|
|
|
—
|
|
|
63,128
|
|
||||||
Investment in Subsidiaries
|
—
|
|
|
—
|
|
|
(62,800
|
)
|
|
—
|
|
|
62,800
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(478
|
)
|
|
—
|
|
|
(478
|
)
|
||||||
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES
|
—
|
|
|
(201
|
)
|
|
(62,800
|
)
|
|
(92,460
|
)
|
|
62,800
|
|
|
(92,661
|
)
|
||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Issuance of debt
|
—
|
|
|
—
|
|
|
1,238,389
|
|
|
—
|
|
|
—
|
|
|
1,238,389
|
|
||||||
Repayment of debt
|
—
|
|
|
—
|
|
|
(1,107,062
|
)
|
|
—
|
|
|
—
|
|
|
(1,107,062
|
)
|
||||||
Dividends paid
|
(124,628
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124,628
|
)
|
||||||
Proceeds from the issuance of common shares
|
3,347
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,347
|
|
||||||
Debt issuance costs
|
—
|
|
|
—
|
|
|
(12,380
|
)
|
|
—
|
|
|
—
|
|
|
(12,380
|
)
|
||||||
Repurchase of common shares
|
(1,834
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,834
|
)
|
||||||
Purchase of timberland deeds for Rayonier Advanced Materials
|
(12,677
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,677
|
)
|
||||||
Debt issuance funds distributed to Rayonier Advanced Materials
|
(924,943
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(924,943
|
)
|
||||||
Proceeds from spin-off of Rayonier Advanced Materials
|
906,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
906,200
|
|
||||||
Change in restricted cash reserved for dividends
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,000
|
)
|
||||||
Intercompany distributions
|
—
|
|
|
(149,525
|
)
|
|
—
|
|
|
65,318
|
|
|
84,207
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(680
|
)
|
|
—
|
|
|
(680
|
)
|
||||||
CASH USED FOR FINANCING ACTIVITIES
|
(229,535
|
)
|
|
(149,525
|
)
|
|
118,947
|
|
|
64,638
|
|
|
84,207
|
|
|
(111,268
|
)
|
||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
||||||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in cash and cash equivalents
|
(91,000
|
)
|
|
792
|
|
|
56,147
|
|
|
56,478
|
|
|
—
|
|
|
22,417
|
|
||||||
Balance, beginning of year
|
130,181
|
|
|
304
|
|
|
10,719
|
|
|
58,440
|
|
|
—
|
|
|
199,644
|
|
||||||
Balance, end of period
|
$
|
39,181
|
|
|
$
|
1,096
|
|
|
$
|
66,866
|
|
|
$
|
114,918
|
|
|
$
|
—
|
|
|
$
|
222,061
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2013
|
||||||||||||||||||||||
|
Rayonier Inc.
(Parent
Guarantor)
|
|
ROC (Subsidiary Guarantor)
|
|
Rayonier TRS
Holdings Inc.
(Issuer)
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES
|
$
|
248,552
|
|
|
$
|
247,599
|
|
|
$
|
64,000
|
|
|
$
|
212,977
|
|
|
$
|
(537,456
|
)
|
|
$
|
235,672
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(89
|
)
|
|
—
|
|
|
(74,498
|
)
|
|
—
|
|
|
(74,587
|
)
|
||||||
Purchase of additional interest in New Zealand joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
(139,879
|
)
|
|
—
|
|
|
(139,879
|
)
|
||||||
Purchase of timberlands
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,447
|
)
|
|
—
|
|
|
(10,447
|
)
|
||||||
Intercompany purchase of real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
984
|
|
|
(984
|
)
|
|
—
|
|
||||||
Jesup mill cellulose specialties expansion
|
—
|
|
|
—
|
|
|
—
|
|
|
(100,185
|
)
|
|
—
|
|
|
(100,185
|
)
|
||||||
Proceeds from disposition of Wood Products business
|
—
|
|
|
—
|
|
|
—
|
|
|
72,953
|
|
|
—
|
|
|
72,953
|
|
||||||
Change in restricted cash
|
—
|
|
|
—
|
|
|
—
|
|
|
7,603
|
|
|
—
|
|
|
7,603
|
|
||||||
Investment in Subsidiaries
|
(138,178
|
)
|
|
(138,178
|
)
|
|
(249,481
|
)
|
|
—
|
|
|
525,837
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
1,700
|
|
|
—
|
|
|
(1,163
|
)
|
|
—
|
|
|
537
|
|
||||||
CASH USED FOR INVESTING ACTIVITIES
|
(138,178
|
)
|
|
(136,567
|
)
|
|
(249,481
|
)
|
|
(244,632
|
)
|
|
524,853
|
|
|
(244,005
|
)
|
||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Issuance of debt
|
175,000
|
|
|
—
|
|
|
280,000
|
|
|
—
|
|
|
—
|
|
|
455,000
|
|
||||||
Repayment of debt
|
(250,000
|
)
|
|
—
|
|
|
(23,087
|
)
|
|
—
|
|
|
—
|
|
|
(273,087
|
)
|
||||||
Dividends paid
|
(113,222
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113,222
|
)
|
||||||
Proceeds from the issuance of common shares
|
6,643
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,643
|
|
||||||
Excess tax benefits on stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
7,399
|
|
|
—
|
|
|
7,399
|
|
||||||
Repurchase of common shares
|
(11,241
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,241
|
)
|
||||||
Intercompany distributions
|
—
|
|
|
(108,549
|
)
|
|
(64,000
|
)
|
|
159,946
|
|
|
12,603
|
|
|
—
|
|
||||||
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES
|
(192,820
|
)
|
|
(108,549
|
)
|
|
192,913
|
|
|
167,345
|
|
|
12,603
|
|
|
71,492
|
|
||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
—
|
|
|
(174
|
)
|
|
—
|
|
|
(174
|
)
|
||||||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in cash and cash equivalents
|
(82,446
|
)
|
|
2,483
|
|
|
7,432
|
|
|
135,516
|
|
|
—
|
|
|
62,985
|
|
||||||
Balance, beginning of year
|
252,888
|
|
|
3,966
|
|
|
19,358
|
|
|
4,384
|
|
|
—
|
|
|
280,596
|
|
||||||
Balance, end of period
|
$
|
170,442
|
|
|
$
|
6,449
|
|
|
$
|
26,790
|
|
|
$
|
139,900
|
|
|
$
|
—
|
|
|
$
|
343,581
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2014
|
||||||||||||||||||
|
Rayonier Inc.
(Parent
Issuer)
|
|
Subsidiary Guarantors
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||
SALES
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163,145
|
|
|
$
|
—
|
|
|
$
|
163,145
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
121,105
|
|
|
—
|
|
|
121,105
|
|
|||||
Selling and general expenses
|
—
|
|
|
2,394
|
|
|
11,467
|
|
|
—
|
|
|
13,861
|
|
|||||
Other operating expense, net
|
—
|
|
|
1,573
|
|
|
(12,962
|
)
|
|
—
|
|
|
(11,389
|
)
|
|||||
|
—
|
|
|
3,967
|
|
|
119,610
|
|
|
—
|
|
|
123,577
|
|
|||||
OPERATING (LOSS) INCOME
|
—
|
|
|
(3,967
|
)
|
|
43,535
|
|
|
—
|
|
|
39,568
|
|
|||||
Interest expense
|
(3,196
|
)
|
|
(11,207
|
)
|
|
(1,209
|
)
|
|
—
|
|
|
(15,612
|
)
|
|||||
Interest and miscellaneous income (expense), net
|
2,733
|
|
|
(4,101
|
)
|
|
(3,017
|
)
|
|
—
|
|
|
(4,385
|
)
|
|||||
Equity in income from subsidiaries
|
18,848
|
|
|
33,254
|
|
|
—
|
|
|
(52,102
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
18,385
|
|
|
13,979
|
|
|
39,309
|
|
|
(52,102
|
)
|
|
19,571
|
|
|||||
Income tax benefit (expense)
|
—
|
|
|
4,869
|
|
|
(18,384
|
)
|
|
—
|
|
|
(13,515
|
)
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
18,385
|
|
|
18,848
|
|
|
20,925
|
|
|
(52,102
|
)
|
|
6,056
|
|
|||||
DISCONTINUED OPERATIONS, NET
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
12,084
|
|
|
—
|
|
|
12,084
|
|
|||||
NET INCOME
|
18,385
|
|
|
18,848
|
|
|
33,009
|
|
|
(52,102
|
)
|
|
18,140
|
|
|||||
Less: Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(245
|
)
|
|
—
|
|
|
(245
|
)
|
|||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC.
|
18,385
|
|
|
18,848
|
|
|
33,254
|
|
|
(52,102
|
)
|
|
18,385
|
|
|||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustment
|
2,653
|
|
|
1,888
|
|
|
3,517
|
|
|
(4,541
|
)
|
|
3,517
|
|
|||||
New Zealand joint venture cash flow hedges
|
(598
|
)
|
|
(1,710
|
)
|
|
(920
|
)
|
|
2,308
|
|
|
(920
|
)
|
|||||
Amortization of pension and postretirement plans, net of income tax
|
58,873
|
|
|
57,253
|
|
|
92,714
|
|
|
(149,967
|
)
|
|
58,873
|
|
|||||
Total other comprehensive income
|
60,928
|
|
|
57,431
|
|
|
95,311
|
|
|
(152,200
|
)
|
|
61,470
|
|
|||||
COMPREHENSIVE INCOME
|
79,313
|
|
|
76,279
|
|
|
128,320
|
|
|
(204,302
|
)
|
|
79,610
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
297
|
|
|
—
|
|
|
297
|
|
|||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.
|
$
|
79,313
|
|
|
$
|
76,279
|
|
|
$
|
128,023
|
|
|
$
|
(204,302
|
)
|
|
$
|
79,313
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Three Months Ended June 30, 2013
|
||||||||||||||||||
|
Rayonier Inc.
(Parent
Issuer)
|
|
Subsidiary Guarantors
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||
SALES
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
154,889
|
|
|
$
|
—
|
|
|
$
|
154,889
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
127,861
|
|
|
—
|
|
|
127,861
|
|
|||||
Selling and general expenses
|
—
|
|
|
2,680
|
|
|
12,023
|
|
|
—
|
|
|
14,703
|
|
|||||
Other operating expense (income), net
|
180
|
|
|
(74
|
)
|
|
(3,069
|
)
|
|
(661
|
)
|
|
(3,624
|
)
|
|||||
|
180
|
|
|
2,606
|
|
|
136,815
|
|
|
(661
|
)
|
|
138,940
|
|
|||||
Equity in income of New Zealand joint venture
|
—
|
|
|
—
|
|
|
304
|
|
|
—
|
|
|
304
|
|
|||||
OPERATING (LOSS) INCOME BEFORE GAIN ON CONSOLIDATION OF NEW ZEALAND JOINT VENTURE
|
(180
|
)
|
|
(2,606
|
)
|
|
18,378
|
|
|
661
|
|
|
16,253
|
|
|||||
Gain related to consolidation of New Zealand joint venture
|
—
|
|
|
—
|
|
|
16,098
|
|
|
—
|
|
|
16,098
|
|
|||||
OPERATING (LOSS) INCOME
|
(180
|
)
|
|
(2,606
|
)
|
|
34,476
|
|
|
661
|
|
|
32,351
|
|
|||||
Interest expense
|
(3,414
|
)
|
|
(7,263
|
)
|
|
(674
|
)
|
|
—
|
|
|
(11,351
|
)
|
|||||
Interest and miscellaneous income, net
|
1,759
|
|
|
307
|
|
|
618
|
|
|
—
|
|
|
2,684
|
|
|||||
Equity in income from subsidiaries
|
89,064
|
|
|
96,185
|
|
|
—
|
|
|
(185,249
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
87,229
|
|
|
86,623
|
|
|
34,420
|
|
|
(184,588
|
)
|
|
23,684
|
|
|||||
Income tax (expense) benefit
|
(65
|
)
|
|
2,441
|
|
|
13,505
|
|
|
66
|
|
|
15,947
|
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
87,164
|
|
|
89,064
|
|
|
47,925
|
|
|
(184,522
|
)
|
|
39,631
|
|
|||||
DISCONTINUED OPERATIONS, NET
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
48,260
|
|
|
—
|
|
|
48,260
|
|
|||||
NET INCOME
|
87,164
|
|
|
89,064
|
|
|
96,185
|
|
|
(184,522
|
)
|
|
87,891
|
|
|||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
727
|
|
|
—
|
|
|
727
|
|
|||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC.
|
87,164
|
|
|
89,064
|
|
|
95,458
|
|
|
(184,522
|
)
|
|
87,164
|
|
|||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustment
|
(18,625
|
)
|
|
(28,201
|
)
|
|
(18,625
|
)
|
|
37,250
|
|
|
(28,201
|
)
|
|||||
New Zealand joint venture cash flow hedges
|
878
|
|
|
221
|
|
|
877
|
|
|
(1,754
|
)
|
|
222
|
|
|||||
Amortization of pension and postretirement plans, net of income tax
|
3,717
|
|
|
3,718
|
|
|
6,831
|
|
|
(10,549
|
)
|
|
3,717
|
|
|||||
Total other comprehensive loss
|
(14,030
|
)
|
|
(24,262
|
)
|
|
(10,917
|
)
|
|
24,947
|
|
|
(24,262
|
)
|
|||||
COMPREHENSIVE INCOME
|
$
|
73,134
|
|
|
$
|
64,802
|
|
|
$
|
85,268
|
|
|
$
|
(159,575
|
)
|
|
$
|
63,629
|
|
Less: Comprehensive loss attributable to noncontrolling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9,505
|
)
|
|
$
|
—
|
|
|
$
|
(9,505
|
)
|
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.
|
$
|
73,134
|
|
|
$
|
64,802
|
|
|
$
|
94,773
|
|
|
$
|
(159,575
|
)
|
|
$
|
73,134
|
|
|
CONSOLIDATING STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2014
|
||||||||||||||||||
|
Rayonier Inc.
(Parent
Issuer)
|
|
Subsidiary Guarantors
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||
SALES
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
306,332
|
|
|
$
|
—
|
|
|
$
|
306,332
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
235,036
|
|
|
—
|
|
|
235,036
|
|
|||||
Selling and general expenses
|
—
|
|
|
4,544
|
|
|
22,554
|
|
|
—
|
|
|
27,098
|
|
|||||
Other operating expense (income), net
|
—
|
|
|
3,948
|
|
|
(15,712
|
)
|
|
—
|
|
|
(11,764
|
)
|
|||||
|
—
|
|
|
8,492
|
|
|
241,878
|
|
|
—
|
|
|
250,370
|
|
|||||
OPERATING INCOME (LOSS) BEFORE GAIN ON CONSOLIDATION OF NEW ZEALAND JOINT VENTURE
|
—
|
|
|
(8,492
|
)
|
|
64,454
|
|
|
—
|
|
|
55,962
|
|
|||||
OPERATING INCOME (LOSS)
|
—
|
|
|
(8,492
|
)
|
|
64,454
|
|
|
—
|
|
|
55,962
|
|
|||||
Interest expense
|
(6,389
|
)
|
|
(18,140
|
)
|
|
(1,757
|
)
|
|
—
|
|
|
(26,286
|
)
|
|||||
Interest and miscellaneous income (expense), net
|
5,431
|
|
|
(4,334
|
)
|
|
(6,494
|
)
|
|
—
|
|
|
(5,397
|
)
|
|||||
Equity in income from subsidiaries
|
62,718
|
|
|
86,614
|
|
|
—
|
|
|
(149,332
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
61,760
|
|
|
55,648
|
|
|
56,203
|
|
|
(149,332
|
)
|
|
24,279
|
|
|||||
Income tax benefit (expense)
|
—
|
|
|
7,070
|
|
|
(13,009
|
)
|
|
—
|
|
|
(5,939
|
)
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
61,760
|
|
|
62,718
|
|
|
43,194
|
|
|
(149,332
|
)
|
|
18,340
|
|
|||||
DISCONTINUED OPERATIONS, NET
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
43,092
|
|
|
—
|
|
|
43,092
|
|
|||||
NET INCOME
|
61,760
|
|
|
62,718
|
|
|
86,286
|
|
|
(149,332
|
)
|
|
61,432
|
|
|||||
Less: Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(328
|
)
|
|
—
|
|
|
(328
|
)
|
|||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC.
|
61,760
|
|
|
62,718
|
|
|
86,614
|
|
|
(149,332
|
)
|
|
61,760
|
|
|||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
15,547
|
|
|
15,547
|
|
|
21,312
|
|
|
(31,086
|
)
|
|
21,320
|
|
|||||
New Zealand joint venture cash flow hedges
|
514
|
|
|
514
|
|
|
791
|
|
|
(1,028
|
)
|
|
791
|
|
|||||
Amortization of pension and postretirement plans, net of income tax
|
60,970
|
|
|
60,970
|
|
|
94,334
|
|
|
(155,304
|
)
|
|
60,970
|
|
|||||
Total other comprehensive income
|
77,031
|
|
|
77,031
|
|
|
116,437
|
|
|
(187,418
|
)
|
|
83,081
|
|
|||||
COMPREHENSIVE INCOME
|
138,791
|
|
|
139,749
|
|
|
202,723
|
|
|
(336,750
|
)
|
|
144,513
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
5,722
|
|
|
—
|
|
|
5,722
|
|
|||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.
|
$
|
138,791
|
|
|
$
|
139,749
|
|
|
$
|
197,001
|
|
|
$
|
(336,750
|
)
|
|
$
|
138,791
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATING STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2013
|
||||||||||||||||||
|
Rayonier Inc.
(Parent
Issuer)
|
|
Subsidiary Guarantors
|
|
Non-
guarantors |
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||
SALES
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
261,942
|
|
|
$
|
—
|
|
|
$
|
261,942
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
204,520
|
|
|
—
|
|
|
204,520
|
|
|||||
Selling and general expenses
|
—
|
|
|
5,081
|
|
|
23,019
|
|
|
—
|
|
|
28,100
|
|
|||||
Other operating (income) expense, net
|
(1,701
|
)
|
|
449
|
|
|
(5,859
|
)
|
|
(661
|
)
|
|
(7,772
|
)
|
|||||
|
(1,701
|
)
|
|
5,530
|
|
|
221,680
|
|
|
(661
|
)
|
|
224,848
|
|
|||||
Equity in income of New Zealand joint venture
|
—
|
|
|
—
|
|
|
562
|
|
|
—
|
|
|
562
|
|
|||||
OPERATING INCOME (LOSS) BEFORE GAIN ON CONSOLIDATION OF NEW ZEALAND JOINT VENTURE
|
1,701
|
|
|
(5,530
|
)
|
|
40,824
|
|
|
661
|
|
|
37,656
|
|
|||||
Gain related to consolidation of New Zealand joint venture
|
—
|
|
|
—
|
|
|
16,098
|
|
|
—
|
|
|
16,098
|
|
|||||
OPERATING INCOME (LOSS)
|
1,701
|
|
|
(5,530
|
)
|
|
56,922
|
|
|
661
|
|
|
53,754
|
|
|||||
Interest (expense) income
|
(6,689
|
)
|
|
(14,133
|
)
|
|
1,019
|
|
|
—
|
|
|
(19,803
|
)
|
|||||
Interest and miscellaneous income (expense), net
|
4,178
|
|
|
85
|
|
|
(1,497
|
)
|
|
—
|
|
|
2,766
|
|
|||||
Equity in income from subsidiaries
|
235,774
|
|
|
249,630
|
|
|
—
|
|
|
(485,404
|
)
|
|
—
|
|
|||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
234,964
|
|
|
230,052
|
|
|
56,444
|
|
|
(484,743
|
)
|
|
36,717
|
|
|||||
Income tax (expense) benefit
|
(65
|
)
|
|
5,722
|
|
|
16,219
|
|
|
66
|
|
|
21,942
|
|
|||||
INCOME FROM CONTINUING OPERATIONS
|
234,899
|
|
|
235,774
|
|
|
72,663
|
|
|
(484,677
|
)
|
|
58,659
|
|
|||||
DISCONTINUED OPERATIONS, NET
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income from discontinued operations, net of income tax
|
—
|
|
|
—
|
|
|
176,967
|
|
|
—
|
|
|
176,967
|
|
|||||
NET INCOME
|
234,899
|
|
|
235,774
|
|
|
249,630
|
|
|
(484,677
|
)
|
|
235,626
|
|
|||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
727
|
|
|
—
|
|
|
727
|
|
|||||
NET INCOME ATTRIBUTABLE TO RAYONIER INC.
|
234,899
|
|
|
235,774
|
|
|
248,903
|
|
|
(484,677
|
)
|
|
234,899
|
|
|||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustment
|
(17,650
|
)
|
|
(27,226
|
)
|
|
(17,650
|
)
|
|
35,300
|
|
|
(27,226
|
)
|
|||||
New Zealand joint venture cash flow hedges
|
1,431
|
|
|
775
|
|
|
1,431
|
|
|
(2,862
|
)
|
|
775
|
|
|||||
Amortization of pension and postretirement plans, net of income tax
|
8,687
|
|
|
8,687
|
|
|
6,831
|
|
|
(15,518
|
)
|
|
8,687
|
|
|||||
Total other comprehensive loss
|
(7,532
|
)
|
|
(17,764
|
)
|
|
(9,388
|
)
|
|
16,920
|
|
|
(17,764
|
)
|
|||||
COMPREHENSIVE INCOME
|
227,367
|
|
|
218,010
|
|
|
240,242
|
|
|
(467,757
|
)
|
|
217,862
|
|
|||||
Less: Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(9,505
|
)
|
|
—
|
|
|
(9,505
|
)
|
|||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO RAYONIER INC.
|
$
|
227,367
|
|
|
$
|
218,010
|
|
|
$
|
249,747
|
|
|
$
|
(467,757
|
)
|
|
$
|
227,367
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2014
|
||||||||||||||||||
|
Rayonier Inc.
(Parent
Issuer)
|
|
Subsidiary Guarantors
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES
|
$
|
138,535
|
|
|
$
|
150,518
|
|
|
$
|
84,350
|
|
|
$
|
(147,007
|
)
|
|
$
|
226,396
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(201
|
)
|
|
(80,293
|
)
|
|
—
|
|
|
(80,494
|
)
|
|||||
Purchase of timberlands
|
—
|
|
|
—
|
|
|
(74,817
|
)
|
|
—
|
|
|
(74,817
|
)
|
|||||
Change in restricted cash
|
—
|
|
|
—
|
|
|
63,128
|
|
|
—
|
|
|
63,128
|
|
|||||
Investment in Subsidiaries
|
—
|
|
|
(62,800
|
)
|
|
—
|
|
|
62,800
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
(478
|
)
|
|
—
|
|
|
(478
|
)
|
|||||
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
|
—
|
|
|
(63,001
|
)
|
|
(92,460
|
)
|
|
62,800
|
|
|
(92,661
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Issuance of debt
|
—
|
|
|
1,238,389
|
|
|
—
|
|
|
—
|
|
|
1,238,389
|
|
|||||
Repayment of debt
|
—
|
|
|
(1,107,062
|
)
|
|
—
|
|
|
—
|
|
|
(1,107,062
|
)
|
|||||
Dividends paid
|
(124,628
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124,628
|
)
|
|||||
Proceeds from the issuance of common shares
|
3,347
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,347
|
|
|||||
Debt issuance costs
|
—
|
|
|
(12,380
|
)
|
|
—
|
|
|
—
|
|
|
(12,380
|
)
|
|||||
Repurchase of common shares
|
(1,834
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,834
|
)
|
|||||
Purchase of timberland deeds for Rayonier Advanced Materials
|
(12,677
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,677
|
)
|
|||||
Debt issuance funds distributed to Rayonier Advanced Materials
|
(924,943
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(924,943
|
)
|
|||||
Proceeds from spin-off of Rayonier Advanced Materials
|
906,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
906,200
|
|
|||||
Change in restricted cash reserved for dividends
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,000
|
)
|
|||||
Intercompany distributions
|
—
|
|
|
(149,525
|
)
|
|
65,318
|
|
|
84,207
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
(680
|
)
|
|
—
|
|
|
(680
|
)
|
|||||
CASH USED FOR FINANCING ACTIVITIES
|
(229,535
|
)
|
|
(30,578
|
)
|
|
64,638
|
|
|
84,207
|
|
|
(111,268
|
)
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
|||||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in cash and cash equivalents
|
(91,000
|
)
|
|
56,939
|
|
|
56,478
|
|
|
—
|
|
|
22,417
|
|
|||||
Balance, beginning of year
|
130,181
|
|
|
11,023
|
|
|
58,440
|
|
|
—
|
|
|
199,644
|
|
|||||
Balance, end of period
|
$
|
39,181
|
|
|
$
|
67,962
|
|
|
$
|
114,918
|
|
|
$
|
—
|
|
|
$
|
222,061
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2013
|
||||||||||||||||||
|
Rayonier Inc.
(Parent
Issuer)
|
|
Subsidiary Guarantors
|
|
Non-
guarantors
|
|
Consolidating
Adjustments
|
|
Total
Consolidated
|
||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES
|
$
|
248,552
|
|
|
$
|
247,599
|
|
|
$
|
212,977
|
|
|
$
|
(473,456
|
)
|
|
$
|
235,672
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(89
|
)
|
|
(74,498
|
)
|
|
—
|
|
|
(74,587
|
)
|
|||||
Purchase of additional interest in New Zealand joint venture
|
—
|
|
|
—
|
|
|
(139,879
|
)
|
|
—
|
|
|
(139,879
|
)
|
|||||
Purchase of timberlands
|
—
|
|
|
—
|
|
|
(10,447
|
)
|
|
—
|
|
|
(10,447
|
)
|
|||||
Intercompany purchase of real estate
|
—
|
|
|
—
|
|
|
984
|
|
|
(984
|
)
|
|
—
|
|
|||||
Jesup mill cellulose specialties expansion
|
—
|
|
|
—
|
|
|
(100,185
|
)
|
|
—
|
|
|
(100,185
|
)
|
|||||
Proceeds from disposition of Wood Products business
|
—
|
|
|
—
|
|
|
72,953
|
|
|
—
|
|
|
72,953
|
|
|||||
Change in restricted cash
|
—
|
|
|
—
|
|
|
7,603
|
|
|
—
|
|
|
7,603
|
|
|||||
Investment in Subsidiaries
|
(138,178
|
)
|
|
(387,659
|
)
|
|
—
|
|
|
525,837
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
1,700
|
|
|
(1,163
|
)
|
|
—
|
|
|
537
|
|
|||||
CASH USED FOR INVESTING ACTIVITIES
|
(138,178
|
)
|
|
(386,048
|
)
|
|
(244,632
|
)
|
|
524,853
|
|
|
(244,005
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Issuance of debt
|
175,000
|
|
|
280,000
|
|
|
—
|
|
|
—
|
|
|
455,000
|
|
|||||
Repayment of debt
|
(250,000
|
)
|
|
(23,087
|
)
|
|
—
|
|
|
—
|
|
|
(273,087
|
)
|
|||||
Dividends paid
|
(113,222
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113,222
|
)
|
|||||
Proceeds from the issuance of common shares
|
6,643
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,643
|
|
|||||
Excess tax benefits on stock-based compensation
|
—
|
|
|
—
|
|
|
7,399
|
|
|
—
|
|
|
7,399
|
|
|||||
Repurchase of common shares
|
(11,241
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,241
|
)
|
|||||
Intercompany distributions
|
—
|
|
|
(108,549
|
)
|
|
159,946
|
|
|
(51,397
|
)
|
|
—
|
|
|||||
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES
|
(192,820
|
)
|
|
148,364
|
|
|
167,345
|
|
|
(51,397
|
)
|
|
71,492
|
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
—
|
|
|
—
|
|
|
(174
|
)
|
|
—
|
|
|
(174
|
)
|
|||||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in cash and cash equivalents
|
(82,446
|
)
|
|
9,915
|
|
|
135,516
|
|
|
—
|
|
|
62,985
|
|
|||||
Balance, beginning of year
|
252,888
|
|
|
23,324
|
|
|
4,384
|
|
|
—
|
|
|
280,596
|
|
|||||
Balance, end of period
|
$
|
170,442
|
|
|
$
|
33,239
|
|
|
$
|
139,900
|
|
|
$
|
—
|
|
|
$
|
343,581
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Financial Information (in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Sales
|
|
|
|
|
|
|
|
||||||||
Forest Resources
|
|
|
|
|
|
|
|
||||||||
Atlantic
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
40
|
|
|
$
|
37
|
|
Gulf States
|
13
|
|
|
13
|
|
|
25
|
|
|
25
|
|
||||
Northern
|
25
|
|
|
30
|
|
|
58
|
|
|
54
|
|
||||
New Zealand
|
44
|
|
|
47
|
|
|
83
|
|
|
50
|
|
||||
Total Forest Resources
|
101
|
|
|
109
|
|
|
206
|
|
|
166
|
|
||||
Real Estate
|
|
|
|
|
|
|
|
||||||||
Development
|
1
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Rural
|
6
|
|
|
9
|
|
|
11
|
|
|
11
|
|
||||
Non-Strategic Timberlands
|
27
|
|
|
4
|
|
|
27
|
|
|
25
|
|
||||
Total Real Estate
|
34
|
|
|
13
|
|
|
40
|
|
|
38
|
|
||||
Other Operations
|
28
|
|
|
33
|
|
|
60
|
|
|
58
|
|
||||
Total Sales
|
$
|
163
|
|
|
$
|
155
|
|
|
$
|
306
|
|
|
$
|
262
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Forest Resources
|
$
|
22
|
|
|
$
|
21
|
|
|
$
|
49
|
|
|
$
|
34
|
|
Real Estate
|
28
|
|
|
6
|
|
|
29
|
|
|
23
|
|
||||
Other Operations
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
2
|
|
||||
Corporate and other
|
(10
|
)
|
|
3
|
|
|
(21
|
)
|
|
(5
|
)
|
||||
Operating Income
|
40
|
|
|
32
|
|
|
56
|
|
|
54
|
|
||||
Interest Expense, Interest Income and Other
|
(20
|
)
|
|
(8
|
)
|
|
(32
|
)
|
|
(17
|
)
|
||||
Income Tax (Expense) Benefit
|
(14
|
)
|
|
16
|
|
|
(6
|
)
|
|
22
|
|
||||
Income from Continuing Operations
|
6
|
|
|
40
|
|
|
18
|
|
|
59
|
|
||||
Discontinued Operations, Net
|
12
|
|
|
48
|
|
|
43
|
|
|
177
|
|
||||
Net Income
|
18
|
|
|
88
|
|
|
61
|
|
|
236
|
|
||||
Less: Net income (loss) attributable to noncontrolling interest
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
||||
Net Income Attributable to Rayonier Inc.
|
$
|
18
|
|
|
$
|
87
|
|
|
$
|
62
|
|
|
$
|
235
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings Per Share Attributable to Rayonier Inc.
|
|
|
|
|
|
|
|
||||||||
Continuing Operations
|
$
|
0.05
|
|
|
$
|
0.30
|
|
|
$
|
0.14
|
|
|
$
|
0.44
|
|
Discontinued Operations
|
0.09
|
|
|
0.37
|
|
|
0.33
|
|
|
1.36
|
|
||||
Net Income
|
$
|
0.14
|
|
|
$
|
0.67
|
|
|
$
|
0.47
|
|
|
$
|
1.80
|
|
Sales (in millions)
|
2013
|
|
Changes Attributable to:
|
|
2014
|
||||||||||
Three Months Ended June 30,
|
Price
|
|
Volume/
Mix/Other
|
|
|||||||||||
Atlantic
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
$
|
19
|
|
Gulf States
|
13
|
|
|
1
|
|
|
(1
|
)
|
|
13
|
|
||||
Northern
|
30
|
|
|
—
|
|
|
(5
|
)
|
|
25
|
|
||||
New Zealand
|
47
|
|
|
—
|
|
|
(3
|
)
|
|
44
|
|
||||
Total Sales
|
$
|
109
|
|
|
$
|
4
|
|
|
$
|
(12
|
)
|
|
$
|
101
|
|
Sales (in millions)
|
2013
|
|
Changes Attributable to:
|
|
2014
|
||||||||||
Six Months Ended June 30,
|
Price
|
|
Volume/
Mix/Other
|
|
|||||||||||
Atlantic
|
$
|
37
|
|
|
$
|
7
|
|
|
$
|
(4
|
)
|
|
$
|
40
|
|
Gulf States
|
25
|
|
|
1
|
|
|
(1
|
)
|
|
25
|
|
||||
Northern
|
54
|
|
|
3
|
|
|
1
|
|
|
58
|
|
||||
New Zealand (a)
|
50
|
|
|
2
|
|
|
31
|
|
|
83
|
|
||||
Total Sales
|
$
|
166
|
|
|
$
|
13
|
|
|
$
|
27
|
|
|
$
|
206
|
|
|
|
|
|
|
|
|
|
(a)
|
First quarter 2014 included $38 million of sales from the consolidation of the New Zealand joint venture (“New Zealand JV”), whereas first quarter 2013 was accounted for on the equity method.
|
Operating Income (in millions)
|
2013
|
|
Changes Attributable to:
|
|
2014
|
||||||||||||||
Three Months Ended June 30,
|
Price
|
|
Volume/
Mix
|
|
Cost/Other
|
|
|||||||||||||
Atlantic
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
6
|
|
Gulf States
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Northern
|
10
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
10
|
|
|||||
New Zealand
|
3
|
|
|
—
|
|
|
3
|
|
|
(4
|
)
|
|
2
|
|
|||||
Total Operating Income
|
$
|
21
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
22
|
|
Operating Income (in millions)
|
2013
|
|
Changes Attributable to:
|
|
2014
|
||||||||||||||
Six Months Ended June 30,
|
Price
|
|
Volume/
Mix
|
|
Cost/Other
|
|
|||||||||||||
Atlantic
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
14
|
|
Gulf States
|
5
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
7
|
|
|||||
Northern
|
15
|
|
|
3
|
|
|
4
|
|
|
1
|
|
|
23
|
|
|||||
New Zealand/Other
|
4
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
5
|
|
|||||
Total Operating Income
|
$
|
34
|
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
49
|
|
|
|
|
|
|
|
|
|
|
|
Sales (in millions)
|
2013
|
|
Changes Attributable to:
|
|
2014
|
||||||||||
Three Months Ended June 30,
|
Price
|
|
Volume/Mix
|
|
|||||||||||
Development
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Rural
|
9
|
|
|
1
|
|
|
(4
|
)
|
|
6
|
|
||||
Non-Strategic Timberlands
|
4
|
|
|
—
|
|
|
23
|
|
|
27
|
|
||||
Total Sales
|
$
|
13
|
|
|
$
|
2
|
|
|
$
|
19
|
|
|
$
|
34
|
|
Sales (in millions)
|
2013
|
|
Changes Attributable to:
|
|
2014
|
||||||||||
Six Months Ended June 30,
|
Price
|
|
Volume/Mix
|
|
|||||||||||
Development
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Rural
|
11
|
|
|
2
|
|
|
(2
|
)
|
|
11
|
|
||||
Non-Strategic Timberlands
|
25
|
|
|
(58
|
)
|
|
60
|
|
|
27
|
|
||||
Total Sales
|
$
|
38
|
|
|
$
|
(56
|
)
|
|
$
|
58
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
Operating Income (in millions)
|
2013
|
|
Changes Attributable to:
|
|
2014
|
||||||||||
Three Months Ended June 30,
|
Price
|
|
Volume/Mix
|
|
|||||||||||
Total Operating Income
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
20
|
|
|
$
|
28
|
|
Operating Income (in millions)
|
2013
|
|
Changes Attributable to:
|
|
2014
|
||||||||||
Six Months Ended June 30,
|
Price
|
|
Volume/Mix
|
|
|||||||||||
Total Operating Income
|
$
|
23
|
|
|
$
|
(56
|
)
|
|
$
|
62
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Cash and cash equivalents (a)
|
$
|
222
|
|
|
$
|
200
|
|
Restricted cash
|
75
|
|
|
—
|
|
||
Total debt
|
770
|
|
|
1,574
|
|
||
Shareholders’ equity
|
1,720
|
|
|
1,755
|
|
||
Total capitalization (total debt plus equity)
|
2,490
|
|
|
3,329
|
|
||
Debt to capital ratio
|
31
|
%
|
|
47
|
%
|
(a)
|
Cash and cash equivalents consisted primarily of time deposits with original maturities of 90 days or less and money market accounts.
|
|
2014
|
|
2013
|
||||
Cash provided by (used for):
|
|
|
|
||||
Operating activities
|
$
|
226
|
|
|
$
|
236
|
|
Investing activities
|
(93
|
)
|
|
(244
|
)
|
||
Financing activities
|
(111
|
)
|
|
71
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net Income to EBITDA Reconciliation
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
18
|
|
|
$
|
88
|
|
|
$
|
61
|
|
|
$
|
236
|
|
Interest, net, continuing operations
|
16
|
|
|
9
|
|
|
28
|
|
|
17
|
|
||||
Income tax expense, continuing operations
|
14
|
|
|
(16
|
)
|
|
6
|
|
|
(22
|
)
|
||||
Depreciation, depletion and amortization
|
28
|
|
|
30
|
|
|
54
|
|
|
51
|
|
||||
Discontinued operations (a)
|
29
|
|
|
44
|
|
|
67
|
|
|
92
|
|
||||
EBITDA
|
$
|
105
|
|
|
$
|
155
|
|
|
$
|
216
|
|
|
$
|
374
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
EBITDA by Segment
|
|
|
|
|
|
|
|
||||||||
Forest Resources
|
$
|
44
|
|
|
$
|
49
|
|
|
$
|
96
|
|
|
$
|
78
|
|
Real Estate
|
34
|
|
|
8
|
|
|
36
|
|
|
29
|
|
||||
Other Operations
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
2
|
|
||||
Corporate and other (a)
|
27
|
|
|
96
|
|
|
85
|
|
|
265
|
|
||||
EBITDA
|
$
|
105
|
|
|
$
|
155
|
|
|
$
|
216
|
|
|
$
|
374
|
|
|
Forest Resources
|
|
Real Estate
|
|
Other Operations
|
|
Corporate and Other
|
|
Total
|
||||||||||
Three Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
$
|
22
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
40
|
|
Add: Depreciation, depletion and amortization
|
22
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||
Add: Costs related to spin-off of Performance Fibers business
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||
Add: Discontinued operations (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
41
|
|
|||||
EBITDA
|
$
|
44
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
105
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended June 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
$
|
21
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
32
|
|
Add: Depreciation, depletion and amortization
|
28
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Add: Discontinued operations (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|
93
|
|
|||||
EBITDA
|
$
|
49
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
96
|
|
|
$
|
155
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
$
|
49
|
|
|
$
|
29
|
|
|
$
|
(1
|
)
|
|
$
|
(21
|
)
|
|
$
|
56
|
|
Add: Depreciation, depletion and amortization
|
47
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|||||
Add: Costs related to spin-off of Performance Fibers business
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||
Add: Discontinued operations (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|
110
|
|
|||||
EBITDA
|
$
|
96
|
|
|
$
|
36
|
|
|
$
|
(1
|
)
|
|
$
|
85
|
|
|
$
|
216
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six Months Ended June 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
$
|
34
|
|
|
$
|
23
|
|
|
$
|
2
|
|
|
$
|
(5
|
)
|
|
$
|
54
|
|
Add: Depreciation, depletion and amortization
|
44
|
|
|
6
|
|
|
—
|
|
|
1
|
|
|
51
|
|
|||||
Add: Discontinued operations (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
269
|
|
|
269
|
|
|||||
EBITDA
|
$
|
78
|
|
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
265
|
|
|
$
|
374
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
Cash provided by operating activities
|
$
|
226
|
|
|
$
|
236
|
|
Capital expenditures (a)
|
(80
|
)
|
|
(75
|
)
|
||
Change in committed cash
|
5
|
|
|
1
|
|
||
Excess tax benefits on stock-based compensation
|
—
|
|
|
7
|
|
||
Other
|
3
|
|
|
1
|
|
||
Discontinued operations
|
(64
|
)
|
|
(78
|
)
|
||
CAD
|
90
|
|
|
92
|
|
||
Mandatory debt repayments
|
—
|
|
|
—
|
|
||
Adjusted CAD
|
$
|
90
|
|
|
$
|
92
|
|
Cash used for investing activities
|
$
|
(93
|
)
|
|
$
|
(244
|
)
|
Cash (used for) provided by financing activities
|
$
|
(111
|
)
|
|
$
|
71
|
|
(a)
|
Capital expenditures exclude strategic capital of
$75 million
for timberland acquisitions during the
six
months ended
June 30, 2014
. Strategic capital totaled
$140 million
for the purchase of additional interest in the New Zealand JV and
$10 million
for timberland acquisitions for the
six
months ended
June 30, 2013
.
|
Contractual Financial Obligations (in millions)
|
Total
|
|
Payments Due by Period
|
||||||||||||||||
Remaining 2014
|
|
2015-2016
|
|
2017-2018
|
|
Thereafter
|
|||||||||||||
Long-term debt (a)
|
$
|
771
|
|
|
$
|
—
|
|
|
$
|
336
|
|
|
$
|
63
|
|
|
$
|
372
|
|
Current maturities of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest payments on long-term debt (b)
|
126
|
|
|
14
|
|
|
46
|
|
|
26
|
|
|
40
|
|
|||||
Operating leases — timberland
|
184
|
|
|
4
|
|
|
20
|
|
|
18
|
|
|
142
|
|
|||||
Postretirement obligations (c)
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases — PP&E, offices
|
7
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
2
|
|
|||||
Uncertain tax positions (d)
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations — derivatives (e)
|
5
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
3
|
|
|||||
Purchase obligations — other
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
1,101
|
|
|
$
|
25
|
|
|
$
|
406
|
|
|
$
|
111
|
|
|
$
|
559
|
|
(a)
|
The book value of our long-term debt is currently recorded at $770.0 million on the Company’s consolidated balance sheet, but upon maturity the liability will be $770.5 million.
|
(b)
|
Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of
June 30, 2014
.
|
(c)
|
These amounts represent an estimate of our projected payments related to our unfunded excess pension plan and our postretirement medical and life insurance plans for the next ten years.
|
(d)
|
See
Note 4
—
Income Taxes
for additional information on uncertain tax positions.
|
(e)
|
Purchase obligations represent payments expected to be made on derivative instruments held in New Zealand. See
Note 9
—
Derivative Financial Instruments and Hedging Activities
.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Forest Resources — in thousands of short green tons
|
|
|
|
|
|
|
|
||||
Atlantic
|
698
|
|
|
904
|
|
|
1,534
|
|
|
1,772
|
|
Gulf States
|
451
|
|
|
514
|
|
|
889
|
|
|
923
|
|
Northern
|
447
|
|
|
512
|
|
|
991
|
|
|
967
|
|
New Zealand
|
|
|
|
|
|
|
|
||||
Domestic
|
314
|
|
|
401
|
|
|
623
|
|
|
401
|
|
Export
|
209
|
|
|
200
|
|
|
359
|
|
|
200
|
|
Total
|
2,119
|
|
|
2,531
|
|
|
4,396
|
|
|
4,263
|
|
Real Estate — in acres
|
|
|
|
|
|
|
|
||||
Development
|
68
|
|
|
47
|
|
|
95
|
|
|
133
|
|
Rural
|
2,030
|
|
|
3,831
|
|
|
3,763
|
|
|
5,006
|
|
Non-Strategic Timberlands
|
23,185
|
|
|
3,372
|
|
|
23,547
|
|
|
8,947
|
|
Total
|
25,283
|
|
|
7,250
|
|
|
27,405
|
|
|
14,086
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
Legal Proceedings
|
2.1
|
|
Separation and Distribution Agreement, dated May 28, 2014 by and between Rayonier Inc. and Rayonier Advanced Materials Inc.**
|
Incorporated by reference to Exhibit 2.1 to the Registrant’s May 30, 2014 Form 8-K
|
4.1
|
|
Indenture among Rayonier A.M. Products Inc., the guarantors party thereto from time to time and Wells Fargo Bank, National Association, as Trustee, dated as of May 22, 2014.
|
Incorporated by reference to Exhibit 4.1 to the Registrant’s May 22, 2014 Form 8-K
|
10.1
|
|
Amendment No. 1 to the Amended and Restated Five-Year Revolving Credit Agreement, dated as of May 6, 2014, among Rayonier Inc., Rayonier TRS Holdings Inc., Rayonier Operating Company LLC, the lenders party thereto and Credit Suisse AG, as administrative agent
|
Incorporated by reference to Exhibit 10.1 to the Registrant’s May 7, 2014 Form 8-K
|
10.2
|
|
First Amendment Agreement, dated as of May 6, 2014, among Rayonier Inc., Rayonier TRS Holdings Inc., Rayonier Operating Company LLC, the lenders party thereto and CoBank ACB, as administrative agent, amending that certain Credit Agreement among such parties dated as of December 17, 2012
|
Incorporated by reference to Exhibit 10.2 to the Registrant’s May 7, 2014 Form 8-K
|
10.3
|
|
Agreement between Rayonier Advanced Materials, Inc. and Paul G. Boynton regarding special stock grant, dated May 28, 2014*
|
Incorporated by reference to Exhibit 10.1 to the Registrant’s May 30, 2014 Form 8-K
|
10.4
|
|
Transition Services Agreement, dated as of June 27, 2014, by and between Rayonier Inc. and Rayonier Advanced Materials Inc.
|
Incorporated by reference to Exhibit 10.1 to the Registrant’s June 30, 2014 Form 8-K
|
10.5
|
|
Tax Matters Agreement, dated as of June 27, 2014, by and among Rayonier Inc., Rayonier Advanced Materials Inc., Rayonier TRS Holdings Inc. and Rayonier A.M. Products Inc.
|
Incorporated by reference to Exhibit 10.2 to the Registrant’s June 30, 2014 Form 8-K
|
10.6
|
|
Employee Matters Agreement, dated as of June 27, 2014, by and between Rayonier Inc. and Rayonier Advanced Materials Inc.
|
Incorporated by reference to Exhibit 10.3 to the Registrant’s June 30, 2014 Form 8-K
|
10.7
|
|
Intellectual Property Agreement, dated as of June 27, 2014, by and between Rayonier Inc. and Rayonier Advanced Materials Inc.
|
Incorporated by reference to Exhibit 10.4 to the Registrant’s June 30, 2014 Form 8-K
|
10.8
|
|
Form of Indemnification Agreement between Rayonier Inc. and its Officers and Directors*
|
Filed herewith
|
10.9
|
|
Rayonier Incentive Stock Plan, as amended*
|
Filed herewith
|
10.10
|
|
Description of Rayonier 2014 Performance Share Award Program*
|
Filed herewith
|
10.11
|
|
Deed of Amendment and Restatement of Shareholder Agreement, dated April 22, 2014, by and among Rayonier Canterbury LLC, Waimarie Forests Pty Limited, Matariki Forestry Group, Matariki Forests and Phaunos Timber Fund Limited
|
Filed herewith
|
31.1
|
|
Chief Executive Officer’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
31.2
|
|
Chief Financial Officer’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
32
|
|
Certification of Periodic Financial Reports Under Section 906 of the Sarbanes-Oxley Act of 2002
|
Furnished herewith
|
101
|
|
The following financial information from our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2014, formatted in Extensible Business Reporting Language (“XBRL”), includes: (i) the Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013; (ii) the Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013; (iii) the Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013; and (iv) the Notes to Consolidated Financial Statements
|
Filed herewith
|
|
|
RAYONIER INC.
|
|
|
(Registrant)
|
|
|
|
|
By:
|
/S/ H. EDWIN KIKER
|
|
|
H. Edwin Kiker
Senior Vice President and Chief Financial Officer
(Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)
|
1.
|
Purpose
|
2.
|
Definitions
|
3.
|
Shares Subject to the Plan
|
4.
|
Grant of Awards and Award Agreements
|
5.
|
Stock Options and Rights
|
6.
|
Performance Shares
|
7.
|
Restricted Stock
|
8.
|
Certificates for Awards of Stock
|
9.
|
Change in Control
|
(i)
|
subject to the conditions contained in the final paragraph of this definition, the filing of a report on Schedule 13D with the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the “Act”) disclosing that any person, other than the Company or any employee benefit plan sponsored by the Company, is the beneficial owner (as the term is defined in Rule 13d-3 under the Act) directly or indirectly, of securities representing 20 percent or more of the total voting power represented by the Company’s then outstanding Voting Securities (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire Voting Securities); or
|
(ii)
|
the purchase by any person, other than the Company or any employee benefit plan sponsored by the Company, of shares pursuant to a tender offer or exchange offer to acquire any Voting Securities of the Company (or securities convertible into such Voting Securities) for cash, securities, or any other consideration, provided that after consummation of the offer, the person in question is the beneficial owner, directly or indirectly, of securities representing 20 percent or more of the total voting power represented by the Company’s then outstanding Voting Securities (all as calculated under clause (i)); or
|
(iii)
|
the approval by the shareholders of the Company, and the subsequent occurrence, of (A) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation (other than a merger of the Company in which holders of Common Shares of the Company immediately prior to the merger have the same proportionate ownership of Common Shares of the surviving corporation immediately after the merger as immediately before), or pursuant to which Common Shares of the Company would be converted into cash, securities, or other property, or (B) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company; or
|
(iv)
|
a change in the composition of the Board of the Company at any time during any consecutive 24-month period such that “continuing directors” cease for any reason to constitute at least a 70 percent majority of the Board.
|
10.
|
Beneficiary
|
11.
|
Administration of the Plan
|
12.
|
Amendment, Extension or Termination
|
13.
|
Adjustments in Event of Change in Common Stock
|
14.
|
Forfeiture of Gains on Exercise
|
15.
|
Conditions Subsequent
|
16.
|
Miscellaneous
|
17.
|
Effective Date, Term of Plan and Shareholder Approval
|
•
|
TSR is defined as stock price appreciation plus the reinvestment of dividends on a quarterly basis. For purposes of performance measurement, TSR shall be the final reported figure as may be adjusted by the Committee for unusual items to avoid distortion in the operation of the Program.
|
•
|
TSR over the performance period will be calculated by measuring the value of a hypothetical $100 investment in Rayonier shares as compared to an equal investment in each of the peer group companies.
|
•
|
TSR calculations of stock price appreciation will be the average of the closing prices of Rayonier common shares and that of each of the peer group companies for the first 20 trading dates and last 20 trading dates of the Performance Period.
|
•
|
The TSR performance of Rayonier and the peer group companies will be calculated and Rayonier’s relative performance, on a percentile basis, is determined.
|
•
|
The payout percentage of Target Award based on Rayonier’s percentile TSR performance against the peer group companies will be calculated per the following table:
|
Percentile Rank
|
Award (Expressed As Percent of Target Award)
|
80
th
and Above
|
200%
|
51
st
-79
th
|
100%, plus 3.33% for each incremental percentile position over the 50
th
percentile
|
50
th
|
100%
|
31
st
- 49
th
|
30%, plus 3.5% for each incremental percentile position over the 30
th
percentile
|
30
th
|
30%
|
Below 30
th
|
0%
|
•
|
The payout percentage may not exceed 100% of target awards if Rayonier’s TSR for the Performance Period is negative.
|
•
|
Payment, if any, is to be made in Rayonier Common Shares, and may be offset, to the extent allowed under applicable regulations, by the number of shares equal in value to the amount needed to cover associated tax liabilities.
|
•
|
Dividend equivalents and interest will be paid in cash on the number of Rayonier Common Shares earned under the Program.
|
•
|
Dividends equivalents and interest will be calculated by taking the dividends paid on one share of Rayonier Common Stock during the performance period times the number of shares awarded at the end of the period. Interest on such dividends will be earned at a rate equal to the prime rate as reported in the Wall Street Journal, adjusted and compounded annually, from the date such cash dividends were paid by the Company.
|
•
|
Awards will be valued on January 14 following the end of the performance period. If January 14 falls on a non-trading day, awards will be valued on the next trading day. Awards, including dividends and interest, will be distributed to participants as soon as practicable following the valuation date.
|
•
|
Target awards will be prorated in cases of retirement, death, or disability in accordance with Plan provisions.
|
•
|
Catchmark Timber Trust
|
•
|
Deltic Timber
|
•
|
Forestar
|
•
|
Potlatch Corporation
|
•
|
Plum Creek
|
•
|
Pope Resources
|
•
|
St. Joe Company
|
•
|
Weyerhaeuser
|
A.
|
RAYONIER canterbury LLC,
a limited liability company incorporated in Delaware (
RCL
);
|
B.
|
WAIMARIE FORESTS PTY LIMITED
a limited liability company incorporated in Australia having its registered office at c/- Grant Thornton, Level 17, 383 Kent Street, Sydney NSW 2000, Australia (
WFL
);
|
C.
|
matariki forestry group,
an unlimited liability company incorporated in New Zealand having its registered office at Level 5, 32 - 34 Mahuhu Crescent, Auckland 1010, New Zealand (
MFG
);
|
D.
|
Matariki Forests,
an unlimited liability company incorporated in New Zealand having its registered office at Level 5, 32 - 34 Mahuhu Crescent, Auckland 1010, New Zealand (
MF
); and
|
E.
|
PHAUNOS TIMBER FUND LIMITED
a limited liability company incorporated in Guernsey having its registered office at Arnold House, St Julian’s Avenue, St Peter Port, Guernsey GY1 2PF (
Phaunos
).
|
1.
|
Amendment and Restatement:
With effect from the date of this deed:
|
(a)
|
the Shareholders Agreement is amended and restated in the form set out in the schedule to this deed (
Amended Form
); and
|
(b)
|
references in the Shareholders Agreement to 'this agreement' shall be references to the Shareholders Agreement as amended and restated by this deed.
|
2.
|
Counterparts
: This deed may be executed in any number of counterparts (including facsimile copies) and provided that every party has executed a counterpart, the counterparts together shall constitute a binding and enforceable deed.
|
3.
|
Further assurance
: Each party shall make all applications, execute all documents and do all acts and things necessary to implement and to carry out its obligations under this deed.
|
4.
|
Amendment:
No amendment to this deed will be effective unless it is in writing and signed by each party.
|
5.
|
Assignment:
No party will assign or otherwise transfer any of its rights or obligations under this deed to any other person.
|
6.
|
Governing law
: This deed is governed by and is to be construed in accordance with New Zealand law.
|
SIGNED
by
RAYONIER CANTERBURY LLC
by:
|
||
/S/ NANCY LYNN WILSON
|
|
/S/ PAUL NICHOLLS
|
Signature of officer
|
|
Signature of officer
|
Nancy Lynn Wilson
|
|
Paul Nicholls
|
Name of officer
|
|
Name of officer
|
SIGNED by WAIMARIE FORESTS PTY LIMITED by:
|
||
/S/ HENRY L. WHITTEMORE
|
|
|
Signature of director
|
|
Signature of director
|
Henry L. Whittemore
|
|
|
Name of director
|
|
Name of director
|
SIGNED
by
MATARIKI FORESTRY GROUP
by:
|
||
/S/ JOHN J. KUBLBOCK
|
|
/S/ PAUL NICHOLLS
|
Signature of director
|
|
Signature of director
|
John J. Kublbock
|
|
Paul Nicholls
|
Name of director
|
|
Name of director
|
SIGNED
by
MATARIKI FORESTS
by:
|
||
/S/ JOHN J. KUBLBOCK
|
|
/S/ PAUL NICHOLLS
|
Signature of director
|
|
Signature of director
|
John J. Kublbock
|
|
Paul Nicholls
|
Name of director
|
|
Name of director
|
SIGNED
by
PHAUNOS TIMBER FUND LIMITED
by:
|
||
/S/ HENRY L. WHITTEMORE
|
|
|
Signature of director
|
|
Signature of director
|
Henry L. Whittemore
|
|
|
Name of director
|
|
Name of director
|
1.
|
DEFINITIONS AND INTERPRETATION 1
|
2.
|
GOVERNANCE 4
|
3.
|
DEALING IN SHARES IN MFG 4
|
4.
|
ISSUE OF SHARES IN MFG 7
|
5.
|
FURTHER PROVISIONS REGARDING DEALING IN SHARES 9
|
6.
|
WARRANTIES 10
|
7.
|
COMPLIANCE WITH THIS AGREEMENT AND THE CONSTITUTION 10
|
8.
|
DEFAULT IN RELATION TO MFG 11
|
9.
|
PHAUNOS DISSOLUTION 12
|
10.
|
LIQUIDATION 13
|
11.
|
DETERMINING NET ASSET VALUE 13
|
12.
|
GENERAL 14
|
1.
|
RAYONIER CANTERBURY LLC
, a limited liability company incorporated in Delaware (
RCL
);
|
2.
|
WAIMARIE FORESTS PTY LIMITED
, a limited liability company incorporated in Australia having its registered address atc/- Grant Thornton, Level 17, 383 Kent Street, Sydney NSW 2000, Australia (
WFL
);
|
3.
|
MATARIKI FORESTRY GROUP
, an unlimited liability company incorporated in New Zealand having its registered office at Level 5, 32-34 Mahuhu Crescent, Auckland, New Zealand (
MFG
);
|
4.
|
MATARIKI FORESTS
, an unlimited liability company incorporated in New Zealand having its registered office at32-34 Mahuhu Crescent, Auckland, New Zealand (
MF
); and
|
5.
|
PHAUNOS TIMBER FUND LIMITED,
a limited liability company incorporated in Guernsey having its registered office at LEGIS, 11 New Street, Saint Peter Port, Guernsey GY1 2BT (
Phaunos
).
|
A.
|
RCL and WFL are the shareholders of MFG. MFG is the holding company for the Matariki forestry group of companies. MF, a wholly owned subsidiary of MFG, holds the assets comprising the Matariki forest estate (Matariki Estate). Rayonier Inc has invested in MFG through RCL, its wholly owned subsidiary. Phaunos has invested in MFG through its wholly owned subsidiary, WFL.
|
B.
|
The parties wish to enter into this shareholder agreement to record their respective rights and obligations in relation to MFG and MF.
|
1.
|
DEFINITIONS AND INTERPRETATION
|
1.1
|
Definitions:
In this agreement, unless the context indicates otherwise:
|
(a)
|
wholly owned (directly or indirectly) by the same holding company as that MFG Shareholder;
|
(b)
|
a wholly owned subsidiary of that MFG Shareholder; or
|
(c)
|
owned by the same parties that own that MFG Shareholder;
|
1.2
|
Interpretation:
In this agreement, unless the context indicates otherwise, a reference to:
|
a.
|
a
subsidiary
or
holding company
or
related company
shall be construed in accordance with sections 2(3) and 5 of the Companies Act;
|
b.
|
the singular includes the plural and vice versa;
|
c.
|
a statutory provision includes a reference to:
|
i.
|
the statutory provision as modified or re-enacted or both from time to time (whether before or after the date of this agreement); and
|
ii.
|
any subordinate legislation made under the statutory provision (whether before or after the date of this agreement);
|
d.
|
persons includes a reference to any body corporate, unincorporated association or partnership;
|
e.
|
a person includes a reference to that the person's legal personal representatives or successors;
|
f.
|
a clause or schedule, unless the context otherwise requires, is a reference to a clause or schedule to this agreement;
|
g.
|
$ is to New Zealand dollars, unless otherwise specified.
|
1.3
|
Schedules
: The schedules form part of this agreement and shall have the same force and effect as if set out in the body of this agreement, and references to this agreement include the schedules.
|
1.4
|
Headings
: The headings in this agreement shall not affect the interpretation of this agreement.
|
2.
|
GOVERNANCE
|
2.1
|
MFG governance:
MFG shall be governed in accordance with the provisions set out in schedule two, and otherwise in accordance with the MFG Constitution.
|
3.
|
DEALING IN SHARES IN MFG
|
3.1
|
Grant of security, etc:
No MFG Shareholder shall, except with the prior written consent of the other MFG Shareholder, such consent not to be unreasonably withheld or delayed:
|
a.
|
pledge, mortgage, charge or otherwise encumber any Share or any interest in any Share;
|
b.
|
grant an option over any Share, or any interest in any Share; or
|
c.
|
enter into any agreement in respect of the votes attached to any Share.
|
3.2
|
Pre-emptive rights:
Subject to clauses 3.8 to 3.9, Shares may only be transferred in accordance with clauses 3.3 to 3.7.
|
3.3
|
Sale notice:
In order for any MFG Shareholder (
Selling Shareholder
) to sell, transfer or otherwise dispose of the legal or beneficial ownership of, or the control of, any of its Shares, the Selling Shareholder shall first give notice (
Sale Notice
) to MFG and the other MFG Shareholder (
Non-selling Shareholder
) specifying the total number of Shares it wishes to sell, and the corresponding proportion of its MFG Ordinary Shares and/or MFG Redeemable Shares and Debt Commitment (which, in the case of WFL, shall be the corresponding proportion of Phaunos’ Debt Commitment) that it is required to transfer with the relevant Shares pursuant to clause 5.2 and 5.3 (
Sale Interest
). The minimum number of Shares that may be specified in a Sale Notice must be at least 20% of the Shares (unless the Selling Shareholder holds fewer than 20% of the Shares, in which case the number of Shares that must be specified in a Sale Notice is the total number of Shares held by the Selling Shareholder).
|
3.4
|
Acquisition Notice:
The Non-selling Shareholder may, not later than 20 Business Days after the date of the Sale Notice give irrevocable notice to the Selling Shareholder (
Acquisition Notice
) offering to acquire the Sale Interest and specifying the cash price being offered for the Sale Interest (
Acquisition Price
).
|
3.5
|
Acceptance of Acquisition Notice:
The Selling Shareholder may, not later than 20 Business Days after the date of the Acquisition Notice, give irrevocable notice to the Non-selling Shareholder (
Acceptance Notice
) accepting the offer contained in the Acquisition Notice in which case the Selling Shareholder will be bound to sell, and the Non-selling Shareholder will be bound to acquire, the Sale Interest at the Acquisition Price and, unless the Selling Shareholder and the Non-selling Shareholder agree otherwise, on the terms and conditions set out below:
|
a.
|
the sale shall be conditional on the parties obtaining all necessary consents and approvals to the sale and purchase of the Sale Interest. If the sale is conditional as contemplated in this paragraph (a), the Selling Shareholder and the Non-selling Shareholder shall use their reasonable endeavours, with all due speed and diligence, to obtain all necessary consents;
|
b.
|
the sale shall be settled on the date 10 Business Days after the date of the Acceptance Notice, or if the sale is conditional as contemplated by clause (a), 10 Business Days after the last of the relevant consents is obtained;
|
c.
|
the Selling Shareholder shall transfer to the Non-selling Shareholder good title to the Sale Interest free of any charge or encumbrance (other than any charge or encumbrance to which the Non-selling Shareholder gives its prior approval in writing);
|
d.
|
on settlement of the purchase of the Sale Interest, the Non-selling Shareholder shall pay the purchase price to the Selling Shareholder in cleared funds, and the Selling Shareholder shall deliver to the Non-Selling Shareholder a transfer of the Sale Interest, in a form reasonably acceptable to the both parties;
|
e.
|
the parties shall take all necessary steps to procure the MFG Board to cause the Non-Selling Shareholder to be registered as holder of the Sale Interest; and
|
f.
|
if the Sale interest comprises all of the Selling Shareholder's interest in MFG, the Selling Shareholder will, upon settlement of the purchase of the Sale Interest, procure the removal of any Director appointed by it.
|
3.6
|
Options to sell:
If:
|
a.
|
the Non-selling Shareholder does not give an Acquisition Notice by the deadline set out in clause 3.4;
|
b.
|
the Selling Shareholder does not give an Acceptance Notice by the deadline set out in clause 3.5; or
|
c.
|
any conditions referred to in clause 3.5(a) are not satisfied within 6 months, or if any statutory consents or approvals are required, 9 months, of the date of the Acceptance Notice,
|
d.
|
the entire Sale Interest must be sold to that person;
|
e.
|
the consideration for the sale (which the Non-selling Shareholder shall be entitled to have independently verified and, if non-cash, valued) must be no less than the Acquisition Price;
|
f.
|
the sale must be on the terms and conditions which are not more advantageous to the purchaser than those offered to the Non-selling Shareholder, provided that the terms and conditions shall not be construed as being more advantageous solely because those terms contain arm’s length warranties and other arm’s length purchaser protections usual for a transaction of the nature contemplated; and
|
g.
|
the sale must be completed within 6 months of the date of the Sale Notice (unless clause 3.6(c) is relevant in which case the sale must be completed within 12 months of the date referred to in that clause).
|
3.7
|
Assistance:
MFG and the Non-selling Shareholder shall (and MFG shall procure that the Consultant will), at the cost of the Selling Shareholder, provide such assistance as may be reasonably required by the Selling Shareholder for the purposes of enabling the Selling Shareholder to solicit offers for the Sale Interest, including allowing prospective purchasers to undertake due diligence.
|
3.8
|
Clause to apply again:
If the Selling Shareholder proposes to sell, transfer, or otherwise dispose of the Sale Interest outside the period referred to in clause 3.6(g), then clauses 3.3 to 3.7 will again apply, with any necessary modifications.
|
3.9
|
Transfer to related companies:
Nothing in clause 3.2 shall prevent any MFG Shareholder (
Transferring MFG Shareholder
) transferring all or some of its Shares to a holding company or an MFG Shareholder Sister Company, and the provisions of clauses 3.3 to 3.7 shall not apply to such transfer, provided where the transferee ceases to be a holding company or an MFG Shareholder Sister Company of the Transferring MFG Shareholder, the transferee shall, and the Transferring MFG Shareholder shall procure that, the transferee forthwith transfers back to the Transferring MFG Shareholder (or another holding company or MFG Shareholder Sister Company of the Transferring MFG Shareholder) all Shares that it holds.
|
4.
|
ISSUE OF SHARES IN MFG
|
4.1
|
Stapled Proportions:
The MFG Board must ensure that:
|
a.
|
RCL holds an equal proportion of MFG Ordinary Shares, MFG Redeemable Shares and Debt Commitment (if any); and
|
b.
|
WFL holds an equal proportion of MFG Ordinary Shares and MFG Redeemable Shares, and Phaunos holds a proportion of Debt Commitment (if any) equal to WFL’s Relevant Proportion,
|
4.2
|
Classes of shares:
The MFG Board may issue different Classes of shares in accordance with the provisions of this agreement. Without limiting the Classes which the MFG Board may issue:
|
a.
|
each Class of shares is deemed to constitute a separate Class but, except as expressly provided in this agreement, all the MFG Ordinary Shares have the same rights and privileges and are subject to the same restrictions; and
|
b.
|
any share may be issued upon the basis that it:
|
i.
|
confers preferential rights to distributions of capital or income (or no rights to such distributions); or
|
ii.
|
confers special, limited or conditional voting rights; or
|
iii.
|
does not confer voting rights; or
|
iv.
|
is redeemable in accordance with section 68 of the Companies Act.
|
4.3
|
MFG Board may issue shares and other securities:
The MFG Board may, subject to the terms of this agreement, only issue shares, securities that are convertible into or exchangeable for shares, or options to acquire shares (together referred to in this clause as
New Equity Securities
) in accordance with the following provisions:
|
a.
|
subject to any special rights or restrictions attaching to any existing shares, all New Equity Securities must be offered to all MFG Shareholders in proportion to each MFG Shareholder’s Stapled Proportion;
|
b.
|
subject to sub-clause (c) below, the offer must be made by written notice to each MFG Shareholder stating:
|
i.
|
the number of New Equity Securities to which that MFG Shareholder is entitled;
|
ii.
|
the Class or Classes of which the New Equity Securities will form part, and in the case of securities convertible into, or exchangeable for, shares, the Class of which those shares will upon issue form part;
|
iii.
|
the consideration for which the New Equity Securities will be issued and the terms on which they will be issued;
|
iv.
|
the time (not being less than 10 days nor more than 28 days) within which the offer, if not accepted, will be deemed to be declined;
|
v.
|
that any MFG Shareholder who wishes to acquire New Equity Securities in excess of that MFG Shareholder's entitlement must, when accepting the offer, state the number of excess New Equity Securities which that MFG Shareholder wishes to acquire;
|
vi.
|
that any unclaimed New Equity Securities will be used for satisfying the requests for excess New Equity Securities, upon the basis that the New Equity Securities not claimed by any MFG Shareholder will be allocated first to the other MFG Shareholders who have requested excess New Equity Securities, in proportion to that MFG Shareholder’s Stapled Proportion, provided that no MFG Shareholder shall be allocated more excess New Equity Securities than the number which that MFG Shareholder has requested;
|
vii.
|
that if, thereafter, any New Equity Securities remain unallocated, the MFG Board may offer them to any person whom the MFG Board is prepared to register as an MFG Shareholder provided that the consideration and terms of issue are no more advantageous to that person than those offered to the MFG Shareholders provided further that the terms on which New Equity Securities are offered to that person shall not be construed as being more advantageous solely because those terms contain arm’s length warranties and other arm’s length subscriber protections usual for a transaction of the nature contemplated; and
|
viii.
|
that each MFG Shareholder who accepts the offer of New Equity Securities must increase their holding of MFG Ordinary Shares, MFG Redeemable Shares and/or Debt Commitment (as may be the case) in order to maintain their Stapled Proportion, provided that where WFL accepts the offer of New Equity Securities, Phaunos shall be required to increase its Debt Commitment, equal to the Relevant Proportion held by WFL following the issue of New Equity Securities,
|
c.
|
the New Equity Securities offered to each MFG Shareholder shall be of a Class or Classes already held by that MFG Shareholder. For these purposes, any excess New Equity Securities offered pursuant to clause 4.3(b)(vi) shall, on issue, be issued as MFG Shares of the Class or Classes already held by the relevant MFG Shareholder. New Equity Securities which are convertible or exchangeable into MFG Shares shall be convertible or exchangeable into MFG Shares of a Class or Classes already held by the relevant MFG Shareholder (unless those New Equity Securities are convertible or exchangeable into a new Class of MFG Shares);
|
d.
|
notwithstanding the provisions of sub-clauses (a) and (b) and (c), but subject always to the provisions of schedule 2 of this agreement, the MFG Board may issue New Equity Securities to such persons and on such terms as it thinks fit; and
|
e.
|
if any holders of securities in MFG other than MFG Shares are entitled by the terms of issue of those securities to participate in any issue of New Equity Securities, the provisions of this clause shall be appropriately modified to take account of such entitlement.
|
5.
|
FURTHER PROVISIONS REGARDING DEALING IN SHARES
|
5.1
|
Deed of accession:
If an MFG Shareholder transfers the legal or beneficial ownership of any MFG Shares to any party (other than to a party who has already signed this agreement or a deed of accession), that MFG Shareholder shall procure that the relevant transferee validly executes a deed of accession in a form reasonably satisfactory to the other parties to this agreement, and delivers a copy of that deed of accession to each party to this agreement. If the proposed transfer is of less than the MFG Shareholder's entire interest in MFG, the parties will negotiate in good faith such amendments to this agreement as are necessary and desirable to reflect an increase in the number of shareholders.
|
5.2
|
Stapling of interest under Investor Loan Facility:
Subject to any variation of the terms below in the Investor Loan Facility no MFG Shareholder shall transfer all or any of its MFG Shares without transferring a corresponding proportion of its Debt Commitment, or where WFL is the transferring MFG Shareholder, procuring transfer of a corresponding proportion of Phaunos’ Debt Commitment, in accordance with clause 10.6 of the Investor Loan Facility.
|
5.3
|
Stapling of MFG Ordinary Shares with MFG Redeemable Shares:
No MFG Shareholder shall transfer legal or beneficial ownership to all or any of its MFG Ordinary Shares without transferring a corresponding proportion of its MFG Redeemable Shares and vice versa.
|
5.4
|
Registration of transfers:
The MFG Shareholders shall procure that the MFG Board does not register a transfer of MFG Ordinary Shares or MFG Redeemable Shares unless such transfer has been carried out in accordance with clauses 3.2 to 3.9, clauses 5.1, 5.2 and 5.3 and the requirements of the Companies Act and the MFG Constitution.
|
5.5
|
Board to procure amendment to schedule one:
As soon as is practicable after the registration of a transfer of MFG Shares pursuant to clause 5.4, the MFG Board shall procure an amendment to schedule one reflecting the consequential changes to the identities and shareholdings of the shareholders referred to in that schedule. Upon delivery of that amended schedule to all parties, that amended schedule shall be deemed to be a variation to this agreement.
|
5.6
|
Investment management agreements:
For the avoidance of doubt, nothing in this agreement shall be construed to preclude an MFG Shareholder entering into an investment management agreement in relation to its investment in the Matariki group of companies with any investment manager.
|
5.7
|
Liability of transferring shareholders:
Except to the extent required by law, each MFG Shareholder which transfers its entire holding of MFG Shares to another party, in accordance with the terms of this agreement, shall be deemed released by all other parties hereto from all liability under this agreement from the date of that transfer (except in relation to any prior breach of this agreement by the transferor) and shall no longer be a party to this agreement.
|
6.
|
WARRANTIES
|
6.1
|
Warranties of each party:
Each party to this agreement warrants to each other party as follows:
|
a.
|
it is not aware of any circumstance which might reasonably be expected materially and adversely to affect its entry into this agreement;
|
b.
|
it has the legal right and power to enter into this agreement and to consummate the transactions contemplated under this agreement on and subject to the terms and conditions of this agreement;
|
c.
|
the execution, delivery and performance of this agreement by it has been duly and validly authorised and this agreement is a valid and binding agreement of it enforceable in accordance with its terms;
|
d.
|
this agreement will not conflict with, or result in a breach of, the terms, conditions or provisions of its constitutional documents or any instrument or agreement to which it is a party or by which it may be bound, or which constitutes (with or without the passage of time, the giving of notice, or both) a default under any such instrument or agreement, or results in the acceleration of any indebtedness or the imposition of any penalty or charge; and
|
e.
|
no further authorisation, consent or approval of any person is required as a condition to the validity of this agreement or to give effect to the transactions contemplated under this agreement.
|
7.
|
COMPLIANCE WITH THIS AGREEMENT AND THE CONSTITUTION
|
7.1
|
MFG Shareholders:
Each MFG Shareholder undertakes to the other MFG Shareholder that it shall:
|
a.
|
take all practicable steps including, without limitation, the exercise of votes it directly or indirectly controls at meetings of the MFG Board and MFG Shareholder meetings of MFG to ensure that the terms of this agreement are complied with and to procure that the MFG Board and MFG complies with its obligations and that it shall do all such other acts and things as may be necessary or desirable to implement this agreement; and
|
b.
|
comply fully and promptly with the provisions of the MFG Constitution so that each and every provision of the MFG Constitution (subject to clause 10.1) shall be enforceable by the MFG Shareholders as between themselves in whatever capacity.
|
8.
|
DEFAULT IN RELATION TO MFG
|
8.1
|
Definition:
An Event of Default occurs in respect of an MFG Shareholder (
Defaulting MFG Shareholder
) if, other than as a consequence of a Phaunos Dissolution:
|
a.
|
that MFG Shareholder commits any material breach of or fails to observe any of the material obligations under this agreement and (where such breach or failure is capable of remedy) does not remedy that breach or failure within 20 Business Days of receiving written notice from the Non-Defaulting MFG Shareholder specifying the breach or failure and requiring the remedy of the breach or failure;
|
b.
|
that MFG Shareholder ceases or threatens to cease to carry on all or substantially all of its business or operations;
|
c.
|
an order is made, or a resolution is passed, for the dissolution of that MFG Shareholder;
|
d.
|
an encumbrancer takes possession or a liquidator, provisional liquidator, trustee, receiver, receiver and manager, inspector appointed under any companies or securities legislation, or similar official, is appointed in respect of that MFG Shareholder;
|
e.
|
any step is taken to appoint or with a view to appointing a statutory manager (including the making of any recommendation in that regard by the Securities Commission) under the Corporations (Investigation and Management) Act 1989 in respect of that MFG Shareholder, or it is declared at risk pursuant to that Act;
|
f.
|
a distress, attachment or other execution is levied or enforced upon or commenced against any of the material assets of that MFG Shareholder and is not discharged or stayed within 10 Business Days;
|
g.
|
that MFG Shareholder is unable to pay its debts when due, or is deemed unable to pay its debts under any law, or enters into dealings with any of its creditors with a view to avoiding or in expectation of insolvency, or makes a general assignment or an arrangement or composition with or for the benefit of any of its creditors, or stops or threatens to stop payments generally; or
|
h.
|
anything analogous, or having a substantially similar effect, to anything referred to in paragraphs (b) to (g) inclusive occurs in relation to that MFG Shareholder under the laws of a jurisdiction other than New Zealand.
|
8.2
|
Event of Default:
If an Event of Default occurs:
|
a.
|
the Defaulting MFG Shareholder will be deemed to have given the other MFG Shareholder (
Non-defaulting MFG Shareholder
) a Sale Notice under clause 3.3 in respect of its entire interest in MFG;
|
b.
|
if the Non-defaulting MFG Shareholder gives the Defaulting MFG Shareholder an Acquisition Notice under clause 3.4:
|
i.
|
within 20 Business Days of the Non-defaulting MFG Shareholder becoming aware of the Event of the Default; or
|
ii.
|
if the Event of Default is continuing, while the Event of Default is continuing,
|
c.
|
the voting rights of the Defaulting MFG Shareholder will be deemed to have been suspended.
|
8.3
|
Other remedies:
Clause 8.2 is without prejudice to any other right, power or remedy under this agreement, at law, or otherwise, that any MFG Shareholder has in respect of a default by any other MFG Shareholder.
|
9.
|
PHAUNOS DISSOLUTION
|
9.1
|
Phaunos Dissolution:
If a Phaunos Dissolution occurs, WFL must use its reasonable endeavours to sell its entire interest in MFG to a third party. For the avoidance of doubt, clauses 3.2 to 3.8 will apply to any sale under this clause 9.
|
9.2
|
Partition plan:
If a sale is not completed within 2 years of the Phaunos Dissolution occurring WFL and RCL must, within 60 Business Days from the end of the 2 year period, agree on the terms and conditions of a partition plan or an alternative solution.
|
9.3
|
Failure to agree partition plan:
|
a.
|
If the Defaulting MFG Shareholder and the Non-Defaulting MFG Shareholder fail to come to an agreement as contemplated in clause 9.2, either may give written notice to the other and to MFG (
Dispute Notice
) referring the matter for determination by a single person who is suitably qualified and experienced expert (
Expert
). If the parties are unable to agree on the person to be appointed as Expert within 5 Business Days after delivery of the Dispute Notice, the Expert will be nominated by the President for the time being of the New Zealand Law Society;
|
b.
|
The Expert will be appointed to determine a fair and equitable division of the estate between the MFG Shareholders meeting the following criteria:
|
i.
|
the proportionate value of the net assets each MFG Shareholder is allocated must approximate, insofar as practicable, that MFG Shareholder's Relevant Proportion;
|
ii.
|
the determination may require an MFG Shareholder to make a cash payment to the other to ensure that, when the cash payment is taken into account, the criterion in paragraph (i) is met;
|
iii.
|
the determination must require that RCL be allocated all of the Shares (the intention being that the assets of MFG which are to be allocated to WFL will be transferred to WFL or its nominee, and the Shares which WFL holds in MFG will be transferred to RCL or its nominee; and
|
iv.
|
the value of the net assets of the Matariki forestry group of companies, and the value of the net assets allocated to each MFG Shareholder, will be determined in accordance with clause 11; and
|
c.
|
In determining the matter:
|
i.
|
the Expert will be deemed to be acting as an expert, not as a mediator or an arbitrator;
|
ii.
|
nothing in this clause will constitute a submission to arbitration under the Arbitration Act 1996;
|
iii.
|
each party must give the Expert any information and assistance, and will ensure that its duly authorised representatives meet with the Expert, as the Expert may reasonably require in order to expedite the resolution of the Dispute;
|
iv.
|
the parties will be jointly and severally liable to the Expert for all costs incurred by the Expert, but the Expert may allocate, as between the parties, the responsibility for payment of those costs and that allocation will be binding on the parties; and
|
v.
|
any determination of the Expert will, in the absence of obvious error or fraud on the part of the Expert, be final and binding on the parties.
|
10.
|
LIQUIDATION
|
10.1
|
Procedure on liquidation:
If pursuant to any provision of this agreement MFG is required to be liquidated, the MFG Shareholders shall without delay take all necessary steps to ensure that a special resolution of shareholders of MFG is passed appointing as liquidator of MFG a person agreed by the MFG Shareholders, or failing agreement, chosen on the application of any MFG Shareholder by the president for the time being of the New Zealand Institute of Chartered Accountants or his or her nominee.
|
11.
|
DETERMINING NET ASSET VALUE
|
11.1
|
Net Asset Value:
In determining the net asset value of the Matariki forestry group of companies under this agreement, the following provisions will apply:
|
a.
|
the value of the land and forestry assets shall be determined by reference to the most recent forestry valuation and land valuation carried out by the independent forestry valuer and the independent land valuer appointed to Matariki (
Independent Valuer
) in relation to the Matariki forestry group of companies, unless an MFG Shareholder or the Expert requires that the forestry valuation and land valuation be updated, in which case:
|
i.
|
the parties will ensure that the Independent Valuer will prepare, at the cost of MFG, an updated forestry valuation and land valuation as soon as reasonably practicable;
|
ii.
|
the value of the land and forestry assets shall be determined by reference to the updated forestry valuation and land valuation provided by the Independent Valuer;
|
iii.
|
the MFG Shareholders shall promptly and openly make available to the Independent Valuer all information in their possession or under their control relating to MFG to enable the Independent Valuer to proceed with the preparation of the updated forestry valuation and land valuation;
|
iv.
|
the parties shall adhere to such adjustments to the time frames set out in clause 8or 9 (as the case may be) as may be appropriate to reflect the time taken to prepare the updated forestry valuation and land valuation;
|
v.
|
the determination of the Independent Valuer will, in the absence of obvious error or fraud on the part of the Independent Valuer, be final and binding; and
|
b.
|
the other assets and liabilities will be valued at fair market value, consistent with MFG's IFRS financial statements.
|
12.
|
GENERAL
|
12.1
|
Conflicting provisions:
If there is any conflict or inconsistency between the provisions of this agreement and the MFG Constitution or the MF Constitution, as the case may be, this agreement shall prevail.
|
12.2
|
Termination:
This agreement may be terminated upon the written agreement of all parties.
|
12.3
|
Payments free and clear:
All amounts payable by one party to another pursuant to this agreement shall be paid free and clear of and, except to the extent required by law, without any deduction or withholding on account of any tax. If any party is required by law to make any deduction or withholding from any amount it is required to pay pursuant to this agreement, then that party shall increase the relevant payment to ensure that the recipient receives a net amount equal to the amount it would have received had no such deduction or withholding been made.
|
12.4
|
Confidentiality:
Each party shall at all times keep confidential, treat as privileged, and not directly or indirectly make any disclosure or use, or allow any disclosure or use to be made, of any provision of this agreement or of any information relating to any provision, or the subject matter, of this agreement, or any information directly or indirectly obtained from another party under or in connection with this agreement, except to the extent:
|
a.
|
required by law;
|
b.
|
to satisfy the reporting requirements of any related company or other member of its group;
|
c.
|
necessary to satisfy the requirements of any applicable stock exchange;
|
d.
|
necessary to obtain the benefit of, or to carry out obligations under, this agreement;
|
e.
|
that the information is or becomes available in the public domain without breach by a party of its confidentiality obligations under this clause or at law;
|
f.
|
that disclosure is made to a subsidiary of the relevant party, or to a director, officer, employee, adviser or financier of the party or a subsidiary of the party, and that person has been informed of the party's confidentiality obligations under this agreement; or
|
g.
|
that disclosure is made to a proposed third party purchaser of MFG Shares or the Matariki Estate, which has entered into an appropriate confidentiality agreement to the satisfaction of MFG.
|
12.5
|
Announcements:
If a party (
Disclosing Party
) is required by law or by the rules of any applicable stock exchange or regulatory authority to make any announcement or disclosure relating to any matter the subject of this Agreement, prior to making such announcement or disclosure, to the extent permitted by such law or rules, the Disclosing Party shall give the other parties (
Non Disclosing Parties
) at least 5 Business Days’ notice and shall consult with the Non Disclosing Parties regarding the form and content of the announcement or disclosure.
|
12.6
|
Liability:
For the avoidance of doubt, the liability of each party to this agreement to any other party is limited (save as required by law) to the extent expressly provided for in this agreement.
|
12.7
|
Variation:
No variation of this agreement shall be valid unless it is in writing and signed by or on behalf of each of the parties hereto, except that the MFG Shareholders may, if both of the MFG Shareholders agree, amend the provisions of schedule two, provided that such amendment does not impose an obligation on any party save for MFG, an MFG Shareholder or the MFG Board. If schedule two is amended pursuant to this clause, the amendment shall be deemed effective upon MFG delivering the amended schedule to all parties to this agreement.
|
12.8
|
No waiver:
The failure to exercise or delay in exercising a right or remedy under this agreement shall not constitute a waiver of the right or remedy or a waiver of any other rights or remedies and no single or partial exercise of any right or remedy under this agreement shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy.
|
12.9
|
Rights and remedies cumulative:
The rights and remedies contained in this agreement are cumulative and not exclusive of any rights or remedies provided by law.
|
12.10
|
Assignment:
No party shall assign or transfer or purport to assign or transfer any of its rights or obligations under this agreement, except as expressly permitted herein.
|
12.11
|
Full agreement:
This agreement contains a final and complete integration of all prior expressions by the parties with respect to the subject matter of this agreement and constitutes the entire agreement between the parties with respect to the subject matter of this agreement, superseding all prior oral or written understandings.
|
12.12
|
Further assurances:
The parties shall each execute and deliver such further and other documents and instruments and do such further and other things as may be necessary to implement and carry out the intent of this agreement.
|
12.13
|
Counterparts:
This agreement may be executed in any number of counterparts each of which when executed and delivered (including by way of facsimile) shall be an original, but all the counterparts together shall constitute one and the same instrument.
|
12.14
|
Notices:
Each notice, agreement and other communication (each a
communication
) to be given, delivered or made under this agreement is to be in writing but may be sent by personal delivery, post (by airmail if to another country), facsimile or email. Each communication is to be sent to the address of the relevant party set out below or to any other address from time to time designated for that purpose by at least five working days’ prior notice to the other parties. The initial address details of the parties are set out in schedule three.
|
12.15
|
Service:
A communication under this agreement will only be effective:
|
a.
|
in the case of personal delivery, when delivered;
|
b.
|
if posted locally or delivered to a document exchange, 3 Business Days in the place of receipt, after posting or delivery;
|
c.
|
if posted or delivered overseas, 10 Business Days in the place of receipt, after posting by airmail;
|
d.
|
if made by facsimile, upon production of a transmission report by the machine from which the facsimile was sent which indicates that the correct number of pages was sent to the facsimile number of the recipient designated for the purpose of this agreement; or
|
e.
|
if made by email, upon the recipient acknowledging receipt (whether by way of an automated message or otherwise),
|
12.16
|
Governing law:
This agreement shall be governed by and construed and interpreted in accordance with the laws of New Zealand and each party submits to the exclusive jurisdiction of the courts of New Zealand. Each party irrevocably waives any objection which it might at any time have to the courts of New Zealand being nominated as the forum to
|
MFG Shareholders
|
Percentage of MFG Shares
|
RCL (for MFG Shares and MFG Redeemable Shares)
|
65%
|
WFL (for MFG Shares and MFG Redeemable Shares)
|
35%
|
MF Shareholder
|
Percentage MF Shares
|
MFG
|
100%
|
1.
|
INTERPRETATION
|
1.1
|
Definitions:
For the purpose of this schedule:
|
a.
|
in relation to a Director, the party that appointed that Director in accordance with clause 2.1(a) of this schedule; and
|
b.
|
in relation to an Alternate Director, the party that appointed that Alternate Director in accordance with clause 2.1(b) of this schedule;
|
2.
|
COMPOSITION AND PROCEEDINGS OF THE BOARD
|
2.1
|
Number of directors:
The directors of the Company shall be appointed as follows:
|
a.
|
each MFG Shareholder will have the power to appoint two directors; and
|
b.
|
each MFG Shareholder may from time to time appoint by ordinary resolution, or by notice in writing to the Company, any person not already a director to act as an alternate director.
|
2.2
|
Board resolutions:
Except as provided in this agreement, resolutions of the Board shall be deemed to be passed if approved by a majority of the votes of Directors voting thereon.
|
2.3
|
Quorum:
A quorum of any meeting of the Board must include at least one Director appointed by each MFG Shareholder.
|
2.4
|
Adjournment:
If within 30 minutes after the time appointed for a meeting of the Board a quorum is not present the meeting is adjourned for 14 days to the same time and place unless otherwise agreed by all Directors. At least seven days' notice of the adjourned meeting must be given, and the notice must include a statement that it is given pursuant to this clause. If at the adjourned meeting a quorum is not present within 30 minutes after the time appointed for the meeting the Director or Directors present are a quorum.
|
2.5
|
Directors’ voting rights:
At a meeting of the Board, the Directors appointed by an MFG Shareholder (including their alternates) shall together be entitled to exercise a percentage of the votes which may be cast at that meeting equal to the percentage of the Shares held by the MFG Shareholder who appointed them.
|
2.6
|
Interested Directors:
Except as provided in this agreement including in clause 4.1 below, a Director who is Interested (as defined in the Companies Act) in a transaction entered into or to be entered into by the Company may vote on any matter related to the transaction, and shall be included in the quorum of Directors considering the transaction.
|
2.7
|
Regularity of Board Meetings:
Meetings of the Directors shall be held at regular intervals as shall be determined by the Board but not less frequently than half yearly, but subject to this clause 2.7 the Board may from time to time determine the schedule of such meetings.
|
2.8
|
Telephone or video meetings:
Meetings of the Board may be held with one or more Directors participating by telephone or video conference.
|
2.9
|
Responsibility for management:
The Board shall be responsible for the overall guidance and direction of the Company. When exercising powers or performing duties, each Director may act in what the director believes is in the best interests of his/her appointing Shareholder, even though it may not be in the best interests of the Company.
|
2.10
|
Indemnity on removal of Director:
Any MFG Shareholder removing a director shall be responsible for and agrees with the Company and the other MFG Shareholder to indemnify the other Shareholder and the Company against all losses, liabilities and costs which the other Shareholder or the Company may incur arising out of, or in connection with, any claim by the director for wrongful or unfair dismissal or redundancy or other compensation arising out of the director's removal or loss of office.
|
2.11
|
Matters requiring supermajority consent:
Subject to clauses 2.13 and 2.14 of this schedule) any decision relating to any of the following matters of the Company shall require the consent of a supermajority of the Board, being 80% of the votes to be cast by the Board:
|
a.
|
the issue by the Company of any debenture or loan stock (whether secured or unsecured) or the creation of any mortgage, security interest, charge, lien, encumbrance or other third party right over any of the Company's assets or the giving by the Company of any guarantee or indemnity to or becoming surety for any third party;
|
b.
|
any change in the capital structure of the Company, issue, buyback, cancellation, division, subdivision or consolidation of Shares, the redemption of any MFG Redeemable Shares, the change to the rights attaching to such Shares or MFG Redeemable Shares, the creation of any options to subscribe for or acquire Shares or the creation of any new Class of Shares;
|
c.
|
any change to the distribution policy set out in the agreement or any other distribution of the Company’s assets;
|
d.
|
pursuit or settlement by the Company of any litigation with a potential value in excess of $5 million;
|
e.
|
approval or amendment of annual operating plans or budgets or any activity outside the scope of the annual operating plan or budget of the Company (and, for the avoidance of any doubt, the “management plan” and the “budget” referred to in the Management Agreement, dated on or about the date of this agreement, shall be included for the purposes of this clause);
|
f.
|
any change in the nature of the Company’s business;
|
g.
|
the making of any loan by the Company or the creation, amendment to, renewal or extension of any borrowings by the Company (other than normal trade credit);
|
h.
|
the acquisition or construction or lease of items of tangible or intangible property other than in accordance with the approved annual operating plans or budgets;
|
i.
|
any transaction by the Company with any Shareholder or with any related company of a Shareholder;
|
j.
|
the assignment, sale or other disposal in any 12 month period of any asset or related group of assets (other than stumpage and logs) of the Company having a net book value in aggregate of NZD$5,000,000 or more, other than in accordance with the approved annual operating plans or budgets;
|
k.
|
any change in the accounting policies or the Company’s auditors, bankers, accounting reference date or bank mandates;
|
l.
|
the granting or entering into any licence, agreement or arrangement concerning any part of the name of the Company or any of its intellectual property rights;
|
m.
|
the making, granting or allowing of any claim, disclaimer, surrender, election or consent for taxation purposes;
|
n.
|
appointing any committee of the board or delegating any of the powers of the board to any committee;
|
o.
|
entry into any contract other than on arms-length terms;
|
p.
|
any change in the external forest certification for Matariki Forests (being the Forestry Stewardship Council); and
|
q.
|
any change to the independent forestry valuer appointed to Matariki from the current valuer (being Indufor Asia Pacific Limited).
|
2.12
|
Proceedings if Company is in financial distress:
If an “Event of Default” or “Event of Review” (however defined) occurs under any debt facility agreement, for which the indebtedness owned ranks in priority to the debt owed under the Investor Loan Facility, the Board shall be entitled to resolve, by a supermajority of the Board, being 80% of the votes to be cast by the Board, to raise equity (on a pro-rata basis) amongst existing Shareholders and Classes of shares already on issue, and/or to incur further debt on behalf of the Company.
|
2.13
|
Shareholder approval:
The following matters (which for the avoidance of doubt exclude any issue of securities) must be approved by both Shareholders following approval by a supermajority of the Board, being 80% of the votes to be cast by the Board:
|
a.
|
the acquisition of, or an agreement to acquire, whether contingent or not, assets the value of which is more than 20% of the value of the Company’s assets before the acquisition; or
|
b.
|
the disposition of, or an agreement to dispose of, whether contingent or not, assets the value of which is more than 20% of the value of the Company’s assets before the disposition; or
|
c.
|
a transaction that has or is likely to have the effect of the Company acquiring rights or interests or incurring obligations or liabilities, including contingent liabilities, the value of which is more than 20% of the value of the Company’s assets before the transaction; or
|
d.
|
any alteration to, or revocation of, the constitution; or
|
e.
|
any arrangement for any joint venture or partnership; or
|
f.
|
the merger, amalgamation, liquidation or winding up of the Company; or
|
g.
|
any acquisition by the Company of any part of the issued share capital or of the assets and undertaking of another company or entity; or
|
h.
|
an application for quotation of any shares or other securities of the Company on any securities exchange.
|
2.14
|
D&O Insurance:
The MFG Shareholders will procure that MFG will effect insurance for the directors of the Company, in respect of:
|
a.
|
liability, not being criminal liability, for any act or omission by him or her in such capacity;
|
b.
|
costs incurred by him or her in defending or settling any claim or proceeding relating to any such liability; or
|
c.
|
costs incurred by him or her in defending any criminal proceedings that have been brought against the director in relation to any act or omission in his or her capacity as a director and in which he or she is acquitted.
|
3.
|
DISTRIBUTIONS
|
3.1
|
Profits to be distributed:
The full amount of the Company’s net cash profits available for distribution (within the meaning of section 2 of the Companies Act) in respect of each financial year during the term of this agreement after the provision of working capital and making such transfers to reserves and provisions as in the opinion of the Board ought reasonably to be made, shall be distributed by the Company to the Shareholders by way of distributions on not less than an annual basis, or as and when the Board determines fit (unless the parties agree otherwise).
|
4.
|
ENFORCEMENT OF COMPANY’S RIGHTS
|
4.1
|
Actions against Shareholders:
Any right of action which the Company may have in respect of breach or alleged breach of any agreement between the Company and a Shareholder or related company of a Shareholder shall be prosecuted by the Directors of the Company appointed by the Appointing Party representing the Shareholder which is not, or whose related company is not, responsible for the breach. Those Directors shall have full authority on behalf of the Company to negotiate, litigate and settle any claim arising out of the breach or exercise any right of termination arising out of the breach and the Shareholders shall take all steps within their power to give effect to the provisions of this clause.
|
5.
|
RECORDS AND FINANCIAL INFORMATION
|
5.1
|
Financial year:
Each financial year of the Company shall end on 31 December unless otherwise determined by the Board.
|
5.2
|
Books and records:
The Board shall procure the Company to maintain accurate and complete books, records, accounts, statements and documents of the operation business and financial affairs of the Company, all of which shall be available to the Board for the purpose of inspection and making copies and taking extracts.
|
5.3
|
Financial statements:
The Shareholders shall procure that the Board will prepare and deliver to each of the Shareholders financial statements in respect of the Company consisting of a balance sheet, statement of cash flows and statement of profit and loss, together with such other statements as are advisable, prepared in accordance with international financial reporting standards, as follows:
|
a.
|
unaudited monthly financial statements (which shall include a detailed balance sheet, a detailed statements of profit and loss, and cashflow statements, with comparison to budget and forecast) shall be prepared and delivered to each of the Shareholders within 15 days after the end of each month; and
|
b.
|
audited annual financial statements, accompanied by the report of the auditors thereon, shall be prepared and delivered to each of the Shareholders within three months after the end of each financial year of the Company,
|
5.4
|
Additional financial information:
The Shareholders shall procure that the Company will prepare and deliver to each of the Shareholders such further or other reports and statements concerning the operation, business and financial affairs of the Company as the Board may from time to time consider necessary or advisable, it being the intent of the Shareholders that each of them shall be kept fully and regularly informed regarding the Company.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rayonier Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/
S
/ DAVID L NUNES
|
|
David L. Nunes
President and Chief Executive Officer, Rayonier Inc.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rayonier Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ H. EDWIN KIKER
|
|
H. Edwin Kiker
Senior Vice President and Chief Financial Officer, Rayonier Inc.
|
1.
|
The quarterly report on Form 10-Q of Rayonier Inc. (the "Company") for the period ended
June 30, 2014
(the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ DAVID L. NUNES
|
|
/s/ H. EDWIN KIKER
|
David L. Nunes
|
|
H. Edwin Kiker
|
President and Chief Executive Officer, Rayonier Inc.
|
|
Senior Vice President and
Chief Financial Officer, Rayonier Inc.
|