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What changed in RAYONIER INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of RAYONIER INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+315 added−295 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in RAYONIER INC's 2023 10-K

315 paragraphs added · 295 removed · 242 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

79 edited+35 added−25 removed85 unchanged
Biggest changeThe following table provides a breakdown of our Pacific Northwest timberlands acreage and timber inventory by product and age class as of September 30, 2022: (volumes in MBF, except as noted) Age Class Acres (000’s) Softwood Pulpwood (e) Softwood Sawtimber (e) Total (e) Commercial Forest 0 to 4 years (a) 48 — — — 5 to 9 years 46 — — — 10 to 14 years 46 — — — 15 to 19 years 48 — — — 20 to 24 years 36 43,775 97,224 140,999 25 to 29 years 33 47,422 259,738 307,160 30 to 34 years 46 90,819 637,339 728,158 35 to 39 years 44 83,149 724,359 807,508 40 to 44 years 16 28,039 292,843 320,882 45 to 49 years 5 8,768 81,436 90,204 50+ years 6 15,388 127,378 142,766 Total Commercial Forest 374 317,360 2,220,317 2,537,677 Non-Commercial Forest (b) 4 3,771 22,486 26,257 Productive Forested Acres 378 Restricted Forest (c) 90 112,405 876,591 988,996 Total Forested Acres and Gross Inventory 468 433,536 3,119,394 3,552,930 Plus: Non-Forested Acres (d) 18 Gross Acres 486 Less: Pre-Merchantable Age Class Inventory (1,177,344) Less: Restricted Forest Inventory (988,996) Total Merchantable Timber 1,386,590 Conversion factor for MBF to SGT (f) 7.75 Total Merchantable Timber (thousands of SGT) 10,746 (a) 0 to 4 years includes clearcut acres not yet replanted.
Biggest changeThe following table provides a breakdown of our Pacific Northwest timberlands acreage and timber inventory by product and age class as of September 30, 2023, presented on a pro forma basis to exclude acreage and timber inventory sold in the Large Disposition: (volumes in MBF, except as noted) (a) Age Class Acres (000’s) Softwood Pulpwood (f) Softwood Sawtimber (f) Total (f) Commercial Forest 0 to 4 years (b) 29 — — — 5 to 9 years 36 — — — 10 to 14 years 37 — — — 15 to 19 years 42 — — — 20 to 24 years 33 34,290 79,499 113,789 25 to 29 years 28 36,666 192,992 229,658 30 to 34 years 39 81,561 534,056 615,617 35 to 39 years 43 83,300 701,410 784,710 40 to 44 years 13 21,289 252,962 274,251 45 to 49 years 4 7,431 78,051 85,482 50+ years 3 6,031 55,960 61,991 Total Commercial Forest 307 270,568 1,894,930 2,165,498 Non-Commercial Forest (c) 4 3,517 21,372 24,889 Productive Forested Acres 311 Restricted Forest (d) 82 26,344 171,468 197,812 Total Forested Acres and Gross Inventory 393 300,429 2,087,770 2,388,199 Plus: Non-Forested Acres (e) 25 Gross Acres 418 Less: Pre-Merchantable Age Class Inventory (959,329) Less: Restricted Forest Inventory (197,812) Total Merchantable Timber 1,231,058 Conversion factor for MBF to SGT 7.75 Total Merchantable Timber (thousands of SGT) 9,541 (a) Table presented as of September 30, 2023 and is presented on a pro forma basis adjusted for the 55,000-acre Large Disposition in Oregon.
SEGMENT INFORMATION As of December 31, 2022, Rayonier operated in five reportable business segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate and Trading. The previously reported Timber Funds segment was liquidated in 2021 with all proceeds being distributed to noncontrolling interests at the end of 2022.
SEGMENT INFORMATION As of December 31, 2023, Rayonier operated in five reportable business segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate and Trading. The previously reported Timber Funds segment was liquidated in 2021 with all proceeds being distributed to noncontrolling interests at the end of 2022.
In addition, non-timber income opportunities associated with our timberlands such as recreational licenses, considerations for the future HBU of the land, and nature-based solutions such as carbon sequestration and credit sales in our New Zealand Timber segment are integral parts of our site-specific management philosophy.
In addition, non-timber income opportunities associated with our timberlands such as recreational licenses, considerations for the future HBU of the land, and land-based solutions such as carbon sequestration and credit sales in our New Zealand Timber segment are integral parts of our site-specific management philosophy.
The construction phase of the cleanup of the Port Gamble Bay area and related tidelands began in September 2015 and the in-water portion of the cleanup was completed in January 2017. Millsite Cleanup With the in-water portion of the cleanup completed, there is expected to be relatively modest cleanup activity on the millsite and a monitoring period.
The construction phase of the cleanup of the Port Gamble Bay area and related tidelands began in September 2015 and the in-water portion of the cleanup was completed in January 2017. Millsite Cleanup With the in-water portion of the cleanup completed, there was expected to be relatively modest cleanup activity on the millsite and a monitoring period.
See Note 2 — Segment and Geographical Information for additional information. 10 Table of Contents COMPETITION TIMBER Timber markets in our Southern and Pacific Northwest regions are relatively fragmented with price being the principal method of competition. In New Zealand, there are five other major private timberland owners accounting for approximately 34% of New Zealand planted forests.
See Note 2 — Segment and Geographical Information for additional information. 10 Table of Contents COMPETITION TIMBER Timber markets in our Southern and Pacific Northwest regions are relatively fragmented with price being the principal method of competition. In New Zealand, there are five other major private timberland owners accounting for approximately 32% of New Zealand planted forests.
We also contribute to research cooperatives that undertake forestry research and development. 13 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS David L. Nunes, 61, Mr. Nunes has more than three decades of timber industry experience, and today serves as Rayonier’s Chief Executive Officer.
We also contribute to research cooperatives that undertake forestry research and development. 13 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS David L. Nunes, 62, Mr. Nunes has more than three decades of timber industry experience, and today serves as Rayonier’s Chief Executive Officer.
The remaining 17% were purchased on a fixed margin basis, with the New Zealand subsidiary earning either a fixed percentage of the net export revenue or a spread on the resale price irrespective of subsequent price fluctuations.
The remaining 9% were purchased on a fixed margin basis, with the New Zealand subsidiary earning either a fixed percentage of the net export revenue or a spread on the resale price irrespective of subsequent price fluctuations.
We estimated sustainable yield for each of our core Timber segments as of December 31, 2022. We manage our U.S. timberlands in accordance with the requirements of the Sustainable Forestry Initiative ® (“SFI”) program. The timberland holdings of the New Zealand subsidiary are certified under the Forest Stewardship Council ® (“FSC”).
We estimated sustainable yield for each of our Timber segments as of December 31, 2023. We manage our U.S. timberlands in accordance with the requirements of the Sustainable Forestry Initiative ® (“SFI”) program. The timberland holdings of the New Zealand subsidiary are certified under the Forest Stewardship Council ® (“FSC”).
Approximately 83% of third-party purchases in New Zealand were purchased at spot prices, with the New Zealand subsidiary thereby assuming some price risk on subsequent resale.
Approximately 91% of third-party purchases in New Zealand were purchased at spot prices, with the New Zealand subsidiary thereby assuming some price risk on subsequent resale.
The New Zealand subsidiary generally seeks to mitigate its risk of loss on procured logs by securing export orders prior to or concurrent with its spot purchases of logs. FOREIGN SALES AND OPERATIONS Sales from non-U.S. operations occur in our New Zealand Timber, Trading and Real Estate segments and comprised approximately 37% of consolidated 2022 sales.
The New Zealand subsidiary generally seeks to mitigate its risk of loss on procured logs by securing export orders prior to or concurrent with its spot purchases of logs. FOREIGN SALES AND OPERATIONS Sales from non-U.S. operations occur in our New Zealand Timber, Trading and Real Estate segments and comprised approximately 25% of consolidated 2023 sales.
We expect that the average annual harvest volume of our Pacific Northwest timberlands over the next five years (2023 to 2027) will be generally in line with our sustainable yield. For additional information, see Item 1 — Business — Discussion of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors .
We expect that the average annual harvest volume of our Pacific Northwest timberlands over the next five years (2024 to 2028) will be generally in line with our sustainable yield. For additional information, see Item 1 — Business — Discussion of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors .
The Large Dispositions category includes sales of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. Proceeds from Large Dispositions are generally used to fund capital allocation priorities, such as share repurchases, debt repayment or acquisitions.
The Large Dispositions category includes sales of productive timberland assets that exceed $20 million in size and do not reflect a demonstrable premium relative to timberland value. Proceeds from Large Dispositions are generally used to fund capital allocation priorities, such as share repurchases, debt repayment or acquisitions.
We expect that the average annual harvest volume of our Southern timberlands over the next five years (2023 to 2027) will be generally in line with our sustainable yield. For additional information, see Item 1 — Business — Discussion of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors .
We expect that the average annual harvest volume of our Southern timberlands over the next five years (2024 to 2028) will be generally in line with our sustainable yield. For additional information, see Item 1 — Business — Discussion of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors .
We estimate that the sustainable yield of our New Zealand timberlands is approximately 2.1 to 2.4 million cubic meters (or 2.4 to 2.7 million tons) annually. We expect that the average annual harvest volume of our New Zealand timberlands over the next five years (2023 to 2027) will be in line with our sustainable yield range.
We estimate that the sustainable yield of our New Zealand timberlands is approximately 2.1 to 2.4 million cubic meters (or 2.4 to 2.7 million tons) annually. We expect that the average annual harvest volume of our New Zealand timberlands over the next five years (2024 to 2028) will be in line with our sustainable yield range.
Pacific Northwest (474,000 acres) and New Zealand (417,000 gross acres, or 297,000 net plantable acres). In addition, we engage in the trading of logs to Pacific Rim markets, predominantly from New Zealand and Australia to support our New Zealand export operations; however, we also engage in log trading activities to these markets from the U.S. South and U.S. Pacific Northwest.
Pacific Northwest (418,000 acres) and New Zealand (421,000 gross acres, or 297,000 net plantable acres). In addition, we engage in the trading of logs to Pacific Rim markets, predominantly from New Zealand and Australia to support our New Zealand export operations; however, we also engage in log trading activities to these markets from the U.S. South and U.S. Pacific Northwest.
Our trees not only remove carbon from the atmosphere through photosynthesis while growing, but even after harvesting, a significant portion of the carbon removed from our forests can remain stored for an extended period of time within the wood products produced from our timber.
Our trees not only remove carbon from the atmosphere through photosynthesis while growing, but after harvesting, a significant portion of the carbon removed from our forests remains stored for an extended period of time within the wood products produced from our timber.
To this end, alongside other initiatives, we have assembled an internal team to further enhance and improve our efforts around promoting a diverse and inclusive culture where all employees are supported, empowered and valued. This team will guide policy objectives within our organization and identify initiatives to help increase diversity within the broader forestry industry.
To this end, alongside other initiatives, we have assembled an internal team to further enhance and improve our efforts around promoting an inclusive culture where all employees are supported, empowered and valued. This team will guide policy objectives within our organization and identify initiatives to help improve inclusivity within the broader forestry industry.
All of these activities are designed to maximize value while complying with SFI, or FSC and PEFC requirements. 5 Table of Contents SOUTHERN TIMBER As of December 31, 2022, our Southern timberlands acreage consisted of approximately 1.92 million acres (including approximately 127,000 acres of leased lands) located in Alabama, Arkansas, Florida, Georgia, Louisiana, Oklahoma, South Carolina and Texas.
All of these activities are designed to maximize value while complying with SFI, or FSC and PEFC requirements. 5 Table of Contents SOUTHERN TIMBER As of December 31, 2023, our Southern timberlands acreage consisted of approximately 1.85 million acres (including approximately 93,000 acres of leased lands) located in Alabama, Arkansas, Florida, Georgia, Louisiana, Oklahoma, South Carolina and Texas.
In these instances, the cost of standing timber is capitalized as an asset on the Consolidated Balance Sheets and recognized as non-depletion cost of sales when sold. In 2022, New Zealand trading volume was approximately 460,000 tons.
In these instances, the cost of standing timber is capitalized as an asset on the Consolidated Balance Sheets and recognized as non-depletion cost of sales when sold. In 2023, New Zealand trading volume was approximately 307,000 tons.
For additional information, see Item 1 — Business — Discussion of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors . In 2022, we acquired approximately 1,000 acres of timberland in New Zealand, including approximately 400 acres of leased lands. For additional information, see Note 4 — Timberland Acquisitions .
For additional information, see Item 1 — Business — Discussion of Timber Inventory and Sustainable Yield and Item 1A — Risk Factors . In 2023, we acquired approximately 1,000 acres of leased lands in New Zealand. For additional information, see Note 4 — Timberland Acquisitions .
Our revenues, operating income and cash flows are primarily derived from the following core business segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate, and Trading. As of December 31, 2022, we owned, leased or managed approximately 2.8 million acres of timberland and real estate located in the U.S. South (1.92 million acres), U.S.
Our revenues, operating income and cash flows are primarily derived from the following core business segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate, and Trading. As of December 31, 2023, we owned, leased or managed approximately 2.7 million acres of timberland and real estate located in the U.S. South (1.85 million acres), U.S.
South, in close proximity to a variety of established pulp, paper and wood products manufacturing facilities and export facilities, which provide a steady source of competitive demand for both pulpwood and higher-value sawtimber products.
South, in close proximity to a variety of established pulp, paper, and wood products manufacturing facilities and export operations, which provide demand for both pulpwood and higher-value sawtimber products.
Bridwell holds a B.S.B.A. in Finance from the University of Central Florida, and both an MBA and JD from Emory University. 14 Table of Contents Shelby L. Pyatt, 52, Ms. Pyatt was appointed Vice President, Human Resources and Information Technology in October 2015, having previously served as Vice President, Human Resources since July 2014.
Bridwell holds a B.S.B.A. in Finance from the University of Central Florida, and both an MBA and JD from Emory University. 14 Table of Contents Shelby L. Pyatt, 53, Ms. Pyatt was appointed Senior Vice President, Human Resources and Information Technology in March 2023, having previously served as Vice President, Human Resources and Information Technology since October 2015.
This includes a comprehensive benefits package, flexible work arrangements and generous paid time off as well as specific workshops and programs tailored to locations. Inclusion and Diversity Rayonier is focused on promoting an inclusive and diverse workforce as we believe this plays an integral role in maintaining an engaging employee experience.
This includes a comprehensive benefits package, flexible work arrangements and generous paid time off as well as specific workshops and programs tailored to locations. 16 Table of Contents Inclusion and Belonging Rayonier is focused on promoting an inclusive workforce as we believe this plays an integral role in maintaining an engaging employee experience.
We estimate that the gross timber inventory and merchantable timber inventory of our New Zealand timberlands were both 15.4 million cubic meters as of December 31, 2022.
We estimate that the gross timber inventory and merchantable timber inventory of our New Zealand timberlands were both 15.9 million cubic meters as of December 31, 2023.
Forest Resources from March 2014 to November 2014. Mr. Long holds bachelor’s and master’s degrees in Forest Resources and Conservation from the University of Florida. Christopher T. Corr, 59, Mr. Corr joined the Company in July 2013 and currently serves as Senior Vice President, Real Estate Development and President, Raydient LLC.
Long holds bachelor’s and master’s degrees in Forest Resources and Conservation from the University of Florida. Christopher T. Corr, 60, Mr. Corr joined the Company in July 2013 and currently serves as Senior Vice President, Real Estate Development and President, Raydient LLC.
Prior to Rayonier, Mr. Bridwell served as counsel for six years at Siemens Corporation. Prior to the Siemens Corporation, he was an attorney with the international law firms of Jones, Day, Reavis & Pogue and Seyfarth, Shaw, Fairweather & Geraldson for five years. Mr.
He joined Rayonier in 2006 as Associate General Counsel for Performance Fibers. Prior to Rayonier, Mr. Bridwell served as counsel for six years at Siemens Corporation. Prior to the Siemens Corporation, he was an attorney with the international law firms of Jones, Day, Reavis & Pogue and Seyfarth, Shaw, Fairweather & Geraldson for five years. Mr.
(f) Includes inventory that is less than 15 years old or less than 17 years old in Oklahoma. 6 Table of Contents PACIFIC NORTHWEST TIMBER As of December 31, 2022, our Pacific Northwest timberlands consisted of approximately 474,000 acres located in Oregon and Washington, of which approximately 378,000 acres were designated as productive acres, meaning land that is capable of growing merchantable timber and where the harvesting of timber is not constrained by physical, environmental or regulatory restrictions.
(f) Includes inventory that is less than 15 years old in all states except for Oklahoma where the standard is less than 17 years old. 6 Table of Contents PACIFIC NORTHWEST TIMBER As of December 31, 2023, our Pacific Northwest timberlands consisted of approximately 418,000 acres located in Oregon and Washington, of which approximately 311,000 acres were designated as productive acres, meaning land that is capable of growing merchantable timber and where the harvesting of timber is not constrained by physical, environmental or regulatory restrictions.
Our product mix in the Pacific Northwest is heavily weighted to sawtimber, which is sold to domestic wood products facilities as well as exported primarily to Pacific Rim markets. We estimate that the sustainable yield of our Pacific Northwest timberlands is approximately 190 to 215 MMBF (or 1.5 to 1.7 million tons) annually.
Our product mix in the Pacific Northwest is heavily weighted to sawtimber, which is sold to domestic wood products facilities as well as exported primarily to Pacific Rim markets. We estimate that the sustainable yield of our Pacific Northwest timberlands is approximately 160 to 185 MMBF (or 1.25 to 1.45 million tons) annually.
Of this volume, approximately 333,000 tons were purchased directly from third parties in New Zealand, 53,000 tons were sourced from outside New Zealand (primarily Australia), and the remaining 74,000 tons were harvested from stumpage purchases and managed harvest arrangements.
Of this volume, approximately 274,000 tons were purchased directly from third parties in New Zealand, 18,000 tons were sourced from outside New Zealand (primarily Australia), and the remaining 15,000 tons were harvested from stumpage purchases and managed harvest arrangements.
Our timber inventory by product and age class for our U.S. segments is presented herein as of September 30, 2022 and does not reflect acquisitions or dispositions completed in the fourth quarter.
Our timber inventory by product and age class for our Southern Timber segment is presented herein as of September 30, 2023 and does not reflect acquisitions or dispositions completed in the fourth quarter.
As of December 31, 2022, the New Zealand subsidiary held 1,631,127 NZUs with respect to timberlands designated as post-1989 forests. These units were received for net carbon sequestered between 2008 and 2013 and from subsequent units acquired during 2019 and 2021.
As of December 31, 2023, the New Zealand subsidiary held 2,368,301 NZUs with respect to timberlands designated as post-1989 forests. These units were received for net carbon sequestered between 2008 and 2018 and from subsequent units acquired during 2019 and 2021.
In 2022, we acquired approximately 139,600 acres of timberland in the Southern region. For additional information, see Note 4 — Timberland Acquisitions . We estimate that the gross timber inventory and merchantable timber inventory of our Southern timberlands were 84 million tons and 68 million tons, respectively, as of September 30, 2022.
In 2023, we acquired approximately 3,500 acres of timberland in the Southern region. For additional information, see Note 4 — Timberland Acquisitions . We estimate that the gross timber inventory and merchantable timber inventory of our Southern timberlands were 89 million tons and 75 million tons, respectively, as of September 30, 2023.
CUSTOMERS In 2022, no individual customer (or group of customers under common control) represented 10% or more of consolidated sales. 11 Table of Contents SEASONALITY Across all our segments, results are normally not impacted significantly by seasonal changes.
There were no other individual customers (or group of customers under common control) who represented 10% or more of consolidated sales during the year. 11 Table of Contents SEASONALITY Across all our segments, results are normally not impacted significantly by seasonal changes.
Bridwell was appointed Vice President, General Counsel in June 2014 and assumed the role of Corporate Secretary in March 2015, having previously served as Assistant General Counsel for Land Resources from 2012 to June 2014 and Associate General Counsel for Timber and Real Estate from 2009 to 2012. He joined Rayonier in 2006 as Associate General Counsel for Performance Fibers.
He was previously promoted to Vice President and General Counsel in June 2014, and shortly thereafter, assumed the additional role of Corporate Secretary in March 2015. Mr. Bridwell previously served as Assistant General Counsel for Land Resources from 2012 to June 2014 and Associate General Counsel for Timber and Real Estate from 2009 to 2012.
We believe our continued commitment to transparency and the stewardship of our assets and capital will allow us to maintain our timberlands’ productivity, more effectively attract and deploy capital and enhance our reputation as a preferred timber industry supplier and employer.
We believe our continued commitment to transparency 3 Table of Contents around the stewardship of our assets and capital will allow us to effectively attract and deploy capital, and further enhance our reputation as a preferred industry supplier and employer.
Every two years we conduct a formal company-wide employee survey to provide anonymous feedback to management. Survey results are benchmarked against our third-party provider’s global database, shared with employees and also reviewed with our Board of Directors to help set non-financial goals for management. The recruitment, retention and development of employees is essential to our success.
Survey results are benchmarked against our third-party provider’s global database, shared with employees and also reviewed with our Board of Directors to help set non-financial goals for management. The recruitment, retention and development of employees is essential to our success.
Our Culture and Employee Retention We view our culture as an asset and believe that fostering a healthy culture is critical to achieving our goals of being the preferred employer in the forestry industry and retaining key talent. We use various means to encourage communication and information sharing across the organization.
Our Culture and Employee Retention We view our culture as an asset and believe that fostering a positive and healthy work environment is critical to achieving our goals of being the preferred employer in the forestry industry and retaining key talent.
Long oversees Rayonier’s global forestry operations, as well as emerging business opportunities associated with nature-based solutions. He joined Rayonier in 1995 as a GIS Forestry Analyst and held multiple positions of increasing responsibility within the forestry division prior to his most recent roles, including Vice President, U.S. Operations from November 2014 to December 2015 and Director, Atlantic Region, U.S.
He joined Rayonier in 1995 as a GIS Forestry Analyst and held multiple positions of increasing responsibility within the forestry division prior to his most recent roles, including Vice President, U.S. Operations from November 2014 to December 2015 and Director, Atlantic Region, U.S. Forest Resources from March 2014 to November 2014. Mr.
The Unimproved Development category comprises properties sold for development for which we have not invested in site improvements. The Rural category comprises all real estate sales (excluding development sales) representing a demonstrable premium above timberland value. The Timberland & Non-Strategic category includes all U.S. and New Zealand real estate sales representing little to no premium to timberland value.
The Unimproved Development category comprises properties sold for development for which we have not invested in site improvements. The Rural category comprises real estate sales (excluding development sales) representing a demonstrable premium above timberland value.
On June 27, 2014, Rayonier completed the tax-free spin-off of its Performance Fibers manufacturing business from its timberland and real estate operations, thereby becoming a “pure-play” timberland REIT.
On June 27, 2014, Rayonier completed the tax-free spin-off of its Performance Fibers manufacturing business from its timberland and real estate operations, thereby becoming a “pure-play” timberland REIT. On May 8, 2020, Rayonier, L.P. acquired Pope Resources, a Delaware Limited Partnership (“Pope Resources”).
Corr holds a Bachelor of Arts degree from the University of Florida and has completed programs with the Harvard Real Estate Institute and the Wharton School of Business at University of Pennsylvania. Mark R. Bridwell, 60, Mr.
Corr holds a Bachelor of Arts degree from the University of Florida and has completed programs with the Harvard Real Estate Institute and the Wharton School of Business at University of Pennsylvania. Mark R. Bridwell, 61, Mr. Bridwell was appointed Senior Vice President, General Counsel and Corporate Secretary in March 2023.
TIMBER Our timber businesses are disaggregated into Southern Timber, Pacific Northwest Timber, and New Zealand Timber. Sales in the Timber segments include the harvesting of timber as well as other non-timber activities, including the leasing and licensing of properties, nature-based solutions, and carbon credit sales.
Sales in the Timber segments include the harvesting of timber as well as other non-timber activities, including the leasing and licensing of properties, land-based solutions, and carbon credit sales.
(b) Includes non-commercial forests with limited productivity. (c) Includes significant portions of riparian management zones, legally restricted forests, and environmentally sensitive areas. (d) Includes roads, rights of way, and all other non-forested areas. (e) Includes a minor component of hardwood in red alder and other species.
(b) 0 to 4 years includes clearcut acres not yet replanted. (c) Includes non-commercial forests with limited productivity. (d) Includes significant portions of riparian management zones, legally restricted forests, and environmentally sensitive areas. (e) Includes roads, rights of way, and all other non-forested areas.
We further intend to be an industry leader in transparent disclosure, particularly relating to our timberland holdings, harvest schedules, inventory, age-class profiles, carbon footprint and other meaningful data regarding our long-term sustainability.
We are committed to responsible stewardship, environmentally and economically sustainable forestry, and positive climate change solutions. We are further committed to being an industry leader in transparent disclosure, particularly relating to our timberland holdings, harvest schedules, timber inventory, age-class profiles, carbon footprint, and other pertinent data regarding our long-term sustainability.
The merchantable age ( i.e. , the age at which timber moves from pre-merchantable to merchantable) is 15 years for our Southern timberlands, with the exception of Oklahoma which is 17 years, 35 years for our Pacific Northwest timberlands, and 20 years for radiata pine and 30 years for Douglas-fir in our New Zealand timberlands. 4 Table of Contents Our estimated merchantable timber inventory changes over time as timber is harvested, as pre-merchantable timber transitions to merchantable timber, as existing merchantable timber inventory grows, as we acquire and sell timberland and as we periodically update our statistical sampling and growth and yield models.
The merchantable age ( i.e. , the age at which timber moves from pre-merchantable to merchantable) is 15 years for our Southern timberlands, with the exception of Oklahoma which is 17 years, 35 years for our Pacific Northwest timberlands, and 20 years for radiata pine and 30 years for Douglas-fir in our New Zealand timberlands.
McHugh has over 20 years of experience in finance and capital markets, focused primarily on the forest products and REIT sectors. He joined Rayonier from Raymond James, where he served as Managing Director in the firm’s Real Estate Investment Banking group, responsible for the firm’s timberland and agriculture sector coverage.
He joined Rayonier from Raymond James, where he served as Managing Director in the firm’s Real Estate Investment Banking group, responsible for the firm’s timberland and agriculture sector coverage.
The following table provides a breakdown of our New Zealand timberlands acreage and timber inventory by product and age class as of December 31, 2022: (volumes in thousands of m 3 , except as noted) Age Class Acres (000’s) Pulpwood (d) Sawtimber (d) Total (d) Radiata Pine 0 to 4 years (a) 67 — — — 5 to 9 years 39 — — — 10 to 14 years 44 — — — 15 to 19 years 45 — — — 20 to 24 years 51 1,865 6,756 8,621 25 to 29 years 18 650 3,529 4,179 30 + years 2 117 369 486 Total Radiata Pine 266 2,632 10,654 13,286 Other (b) 31 945 1,147 2,092 Forested Acres and Merchantable Timber Inventory 297 3,577 11,801 15,378 Conversion factor for m 3 to SGT 1.12 Total Merchantable Timber (thousands of SGT) 17,183 Plus: Non-Productive Acres (c) 120 Gross Acres 417 (a) 0 to 4 years includes clearcut acres not yet replanted.
The following table provides a breakdown of our New Zealand timberlands acreage and timber inventory by product and age class as of December 31, 2023: (volumes in thousands of m 3 , except as noted) Age Class Acres (000’s) Pulpwood (d) Sawtimber (d) Total (d) Radiata Pine 0 to 4 years (a) 69 — — — 5 to 9 years 41 — — — 10 to 14 years 44 — — — 15 to 19 years 40 — — — 20 to 24 years 53 1,909 7,086 8,995 25 to 29 years 18 675 3,623 4,298 30 + years 2 119 389 508 Total Radiata Pine 267 2,703 11,098 13,801 Other (b) 30 921 1,135 2,056 Forested Acres and Merchantable Timber Inventory 297 3,624 12,233 15,857 Conversion factor for m 3 to SGT 1.12 Total Merchantable Timber (thousands of SGT) 17,717 Plus: Non-Productive Acres (c) 124 Gross Acres 421 (a) 0 to 4 years includes clearcut acres not yet replanted.
REAL ESTATE All of our U.S. and New Zealand land or leasehold sales, including HBU and non-HBU, are reported in our Real Estate segment.
See Note 3 — Revenue for information about the sale of carbon units. REAL ESTATE All of our U.S. and New Zealand land sales, including HBU and non-HBU, are reported in our Real Estate segment.
Tice is a Certified Public Accountant in the State of Florida. HUMAN CAPITAL Rayonier is committed to creating an engaging and rewarding employee experience, as well as making safety a priority in everything we do.
Tice will assume the position of Senior Vice President and Chief Financial Officer, effective April 1, 2024. HUMAN CAPITAL Rayonier is committed to creating an engaging and rewarding employee experience, as well as making safety a priority in everything we do.
Our HBU sales involve rural and recreational land as well as properties where we selectively pursue various land-use entitlements and improvements for residential, commercial and industrial development in order to fully realize the enhanced long-term value potential of such properties.
In addition, we selectively pursue land-use entitlements and invest in infrastructure improvements on certain properties that are well-suited for residential, commercial, and industrial development in order to fully realize their long-term value potential, as well as to enhance the value of our surrounding landholdings.
We generate recurring income and cash flow from the harvest and sale of timber and intend to actively manage our timberlands to maximize net present value over the long term by achieving an optimal balance among biological timber growth, generation of cash flow from harvesting activities, and responsible environmental stewardship.
We carefully manage our timberlands to maximize net present value over the long term by achieving an optimal balance among biological timber growth, cash flow generation from harvesting activities, and responsible environmental stewardship. Our timber harvesting strategy is designed to produce a long-term, sustainable yield, which in turn contributes to relatively stable cash flows and timber inventory over time.
(f) Conversion factor was adjusted from 7.99 to 7.75 in the current year to reflect an ongoing mix shift towards Douglas-fir, which has a lower MBF to SGT conversion ratio. 7 Table of Contents NEW ZEALAND TIMBER As of December 31, 2022, our New Zealand timberlands consisted of approximately 417,000 acres (including approximately 229,000 acres of leased lands), of which approximately 297,000 acres were designated as productive or plantation acres, meaning land that is capable of growing merchantable timber and where the harvesting of timber is not constrained by physical, environmental or regulatory restrictions.
(f) Includes a minor component of hardwood in red alder and other species. 7 Table of Contents NEW ZEALAND TIMBER As of December 31, 2023, our New Zealand timberlands consisted of approximately 421,000 acres (including approximately 233,000 acres of leased lands), of which approximately 297,000 acres were designated as productive or plantation acres, meaning land that is capable of growing merchantable timber and where the harvesting of timber is not constrained by physical, environmental or regulatory restrictions.
For conversion purposes, one MBF and one m 3 is equal to approximately 7.75 and 1.12 short green tons, respectively. For comparison purposes, we provide inventory estimates for our Pacific Northwest and New Zealand timberlands in MBF and cubic meters, respectively, as well as in short green tons.
For conversion purposes, one MBF and one m 3 is equal to approximately 7.75 and 1.12 short green tons, respectively.
On May 8, 2020, Rayonier, L.P. acquired Pope Resources, a Delaware Limited Partnership (“Pope Resources”). 1 Table of Contents Under our REIT structure, we are generally not required to pay U.S. federal income taxes on our earnings from timber harvest operations and other REIT-qualifying activities contingent upon meeting applicable distribution, income, asset, shareholder and other tests.
Under our REIT structure, we are generally not required to pay U.S. federal income taxes on our earnings from timber harvest operations and other REIT-qualifying activities contingent upon meeting applicable distribution, income, asset, shareholder and other tests. As of December 31, 2023, Rayonier owns a 98.4% interest in the Operating Partnership and a corresponding portion of taxable income or loss.
As a result, disclosure of the Timber Funds segment results is not presented for 2022, while prior year results are presented for historical purposes. See Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 — Segment and Geographical Information for information on sales and operating income by reportable segment and geographic region.
See Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 — Segment and Geographical Information for information on sales and operating income by reportable segment and geographic region. TIMBER Our timber businesses are disaggregated into Southern Timber, Pacific Northwest Timber, and New Zealand Timber.
She also previously served as Director, Compensation, Benefits and Employee Services from 2009 to July 2014 and Director, Compensation and Employee Services from 2006 to 2009. She joined Rayonier in 2003 as Manager, Compensation. Prior to joining Rayonier, Ms. Pyatt held human resources positions with CSX Corporation and Barnett Bank. Ms. Pyatt holds a bachelor’s degree in Business Management. W.
Prior to this, she served as Vice President, Human Resources from July 2014 to October 2015, Director, Compensation, Benefits and Employee Services from 2009 to July 2014 and Director, Compensation and Employee Services from 2006 to 2009. She joined Rayonier in 2003 as Manager, Compensation. Prior to joining Rayonier, Ms.
Tice was appointed Vice President and Chief Accounting Officer in April 2021, having previously served as Vice President, Financial Services and Corporate Controller. In this position, she acts as the Company’s principal accounting officer. She joined Rayonier in 2010 as Manager, General Ledger, and has held multiple positions of increasing responsibility within the finance and accounting departments.
In this position, she acts as the Company’s principal accounting officer. She joined Rayonier in 2010 as Manager, General Ledger, and has held multiple positions of increasing responsibility within the finance and accounting departments. Prior to joining Rayonier, Ms. Tice held various accounting positions with Deloitte & Touche, the State of Florida, and two private companies located in Florida. Ms.
McHugh holds a B.S.B.A. in Finance from the University of Central Florida and a JD from Harvard Law School. Douglas M. Long, 52, Mr. Long was appointed Executive Vice President and Chief Resource Officer in January 2023, having previously served as Senior Vice President, Forest Resources since December 2015. Mr.
McHugh holds a B.S.B.A. in Finance from the University of Central Florida and a JD from Harvard Law School. Mr. McHugh has been appointed by the Board as Mr. Nunes’ successor and will become President and Chief Executive Officer, effective April 1, 2024. Douglas M. Long, 53, Mr.
We continuously evaluate the highest and best use of our lands and seek to capitalize on identified HBU opportunities through strategies uniquely tailored to maximize value, including selectively pursuing land-use entitlements and infrastructure improvements through one of our taxable REIT subsidiaries.
We continuously evaluate the highest and best use of our lands and seek to capitalize on identified opportunities through strategies uniquely tailored to maximize the value of our lands. Our real estate platform focuses on identifying and executing rural and recreational HBU property sales at significant premiums to our timberland hold value.
For our employees, driving is generally deemed to be the most hazardous activity associated with our business given the geographic dispersion of our assets. However, for our contracted workforce, activities associated with tree felling, extraction of logs and log transportation are the most critical risk areas.
Our safety management programs are designed to use a collaborative approach to focus on both employee and contractor safety. For our employees, driving is generally deemed to be the most hazardous activity associated with our business given the geographic dispersion of our assets.
Prior to joining Rayonier, Ms. Tice held various accounting positions with Deloitte & Touche, the State of Florida, and two private companies located in Florida. Ms. Tice holds a Bachelor of Fine Arts from Florida State University and a Master of Accountancy with a tax concentration from the University of North Florida. Ms.
Tice holds a Bachelor of Fine Arts from Florida State University and a Master of Accountancy with a tax concentration from the University of North Florida. Ms. Tice is a Certified Public Accountant in the State of Florida. In connection with Mr. Nunes’ retirement and the Company’s leadership transition, Ms.
As of December 31, 2022, Rayonier owns a 97.9% interest in the Operating Partnership and a corresponding portion of taxable income or loss. Certain operations are conducted through our taxable REIT subsidiaries (“TRS”) and subject to U.S. federal and state corporate income tax.
Certain operations are conducted through our taxable REIT subsidiaries (“TRS”) and subject to U.S. federal and state corporate income tax. As of December 31, 2023 and as of the date of the filing of this Annual Report on Form 10-K, we believe the Company is in compliance with all REIT tests.
Nunes holds a Bachelors of Arts in Economics from Pomona College and an MBA from the Tepper School of Business at Carnegie Mellon University. Mark D. McHugh, 47, Mr. McHugh was appointed President and Chief Financial Officer in January 2023, having previously served as Senior Vice President and Chief Financial Officer since joining Rayonier in December 2014. Mr.
Nunes holds a Bachelors of Arts in Economics from Pomona College and an MBA from the Tepper School of Business at Carnegie Mellon University. On October 30, 2023, Mr. Nunes notified the Company that he will retire from his role as CEO, effective March 31, 2024. Mark D. McHugh, 48, Mr.
Our 401(k) retirement savings plan includes company matching contributions as well as enhanced retirement contributions. Employee Development We offer a comprehensive approach to training and development which includes micro and on-demand learning, classroom programs, coaching and mentoring, cross-functional assignments, a job rotation program for early career foresters and conferences.
Our 401(k) retirement savings plan includes company matching contributions as well as enhanced retirement contributions. Employee Development We provide a robust training and development program that encompasses a variety of learning methods to cater to diverse needs. This includes micro and on-demand learning for quick and targeted skill upgrades, alongside traditional classroom programs for more in-depth learning.
We are a North Carolina corporation with executive offices located at 1 Rayonier Way, Wildlight, Florida 32097. Our telephone number is (904) 357-9100. OUR COMPETITIVE STRENGTHS We believe that we distinguish ourselves from other timberland owners and other alternative asset investments through the following competitive strengths: • Leading Pure-Play Timberland REIT .
OUR COMPETITIVE STRENGTHS We believe that we distinguish ourselves from other timberland owners and other alternative asset investments through the following competitive strengths: • Only Pure-Play Timberland REIT . We are the only publicly traded “pure-play” timberland REIT, providing our investors with a focused, large-scale timberland investment vehicle.
As of December 31, 2022, we had 419 employees, 322 in the U.S. and 97 in New Zealand. 16 Table of Contents The following charts provide details on diversity at Rayonier as of December 31, 2022: We are seeking to improve our gender and racial diversity and have initiated actions to increase the diversity of qualified candidates.
As of December 31, 2023, we had 438 employees, 341 in the U.S. and 97 in New Zealand. The following charts provide a breakdown of Rayonier’s demographics as of December 31, 2023: We seek to have an inclusive workforce and have initiated actions to develop a diverse pipeline of qualified candidates.
The following table sets forth the estimated volumes of merchantable timber inventory by location in short green tons as of September 30, 2022 for the South and Pacific Northwest and as of December 31, 2022 for New Zealand: (volumes in thousands of SGT) Location Merchantable Inventory (a) % South 67,584 71 Pacific Northwest 10,746 11 New Zealand 17,183 18 95,513 100 (a) For all regions, depletion rate calculations for the upcoming year are based on estimated volumes of merchantable inventory at December 31, 2022.
Merchantable timber inventory for the Pacific Northwest is presented on a pro forma basis adjusted for a 55,000-acre Large Disposition in Oregon completed in the fourth quarter: (volumes in thousands of SGT) Location Merchantable Inventory (a) % South 74,685 73 Pacific Northwest 9,541 9 New Zealand 17,717 18 101,943 100 (a) For all regions, depletion rate calculations for the upcoming year are based on estimated volumes of merchantable inventory at December 31, 2023.
He joined Rayonier in 2001 as a District Technical Forester, and has held multiple positions of increasing responsibility within the Company. Mr. Rogers holds a Bachelor of Science in Forestry from Louisiana Tech University, and both an MBA and MS in Forest Resources from Mississippi State University. April J. Tice, 49, Ms.
Rogers holds a Bachelor of Science in Forestry from Louisiana Tech University, and both an MBA and MS in Forest Resources from Mississippi State University. April J. Tice, 50, Ms. Tice was appointed Vice President and Chief Accounting Officer in April 2021, having previously served as Vice President, Financial Services and Corporate Controller.
We generally engage contractors to perform a number of critical functions, such as the planting of trees and the harvesting and hauling of logs. Our safety management programs are designed to use a collaborative approach to focus on both employee and contractor safety.
It is through adherence to safety protocols and constant vigilance that we have created a workplace where everyone feels secure and supported. We generally engage contractors to perform a number of critical functions, such as the planting of trees and the harvesting and hauling of logs.
As of December 31, 2022, our net debt to enterprise value was 22%. We believe that our advantageous REIT structure and conservative capitalization provide us with a competitive cost of capital and significant financial flexibility to pursue growth initiatives.
We believe that our access to the public capital markets, advantageous REIT structure, and commitment to a conservative capitalization 2 Table of Contents provide us with a competitive cost of capital as well as the financial flexibility to execute a nimble capital allocation strategy with a view towards building long-term value per share.
Rhett Rogers, 46, Mr. Rogers was appointed Vice President, Portfolio Management in February 2017, having previously served as Director, Land Asset Management. Mr. Rogers oversees the Company’s acquisition and disposition activities, including Rural HBU and non-strategic land sales, as well as its land information systems function.
Rogers oversees the Company’s acquisition and disposition activities, including Rural HBU and non-strategic land sales, as well as its land information systems function. He joined Rayonier in 2001 as a District Technical Forester, and has held multiple positions of increasing responsibility within the Company. Mr.
In 2022, we acquired a minimal amount of additional acres of timberlands in the Pacific Northwest region. For additional information, see Note 4 - Timberland Acquisitions . We estimate that the gross timber inventory and merchantable timber inventory of our Pacific Northwest timberlands were 3,553 MMBF and 1,387 MMBF, respectively, as of September 30, 2022.
We estimate that the gross timber inventory and merchantable timber inventory of our Pacific Northwest timberlands were 2,388 MMBF and 1,231 MMBF, respectively, as of September 30, 2023, on a pro forma basis adjusted for the 55,000-acre Large Disposition in Oregon completed in the fourth quarter.
As of December 31, 2022 and as of the date of the filing of this Annual Report on Form 10-K, we believe the Company is in compliance with all REIT tests. See Note 20 — Income Taxes for further discussion of REIT and non-REIT qualifying operations. The Company’s shares are publicly traded on the NYSE under the symbol RYN.
See Note 20 — Income Taxes for further discussion of REIT and non-REIT qualifying operations. 1 Table of Contents The Company’s shares are publicly traded on the NYSE under the symbol RYN. We are a North Carolina corporation with executive offices located at 1 Rayonier Way, Wildlight, Florida 32097. Our telephone number is (904) 357-9100.
The following table provides a breakdown of our Southern timberlands acreage and timber inventory by product and age class as of September 30, 2022: (volumes in thousands of SGT) (a) Age Class Acres (000’s) Pine Pulpwood Pine Sawtimber Hardwood Pulpwood Hardwood Sawtimber Total Pine Plantation 0 to 4 years (b) 271 — — — — — 5 to 9 years 194 — — — — — 10 to 14 years 195 7,646 1,659 51 — 9,356 15 to 19 years 213 11,728 5,268 117 2 17,115 20 to 24 years 193 7,749 7,551 150 3 15,453 25 to 29 years 52 1,865 3,077 83 3 5,028 30 + years 37 1,062 2,704 145 2 3,913 Total Pine Plantation 1,155 30,050 20,259 546 10 50,865 Natural Pine (Plantable) (c) 33 301 648 721 192 1,862 Natural Mixed Pine/Hardwood (d) 533 4,919 8,165 13,971 4,239 31,294 Forested Acres and Gross Inventory 1,721 35,270 29,072 15,238 4,441 84,021 Plus: Non-Forested Acres (e) 68 Gross Acres 1,789 Less: Pre-Merchantable Age Class Inventory (f) (9,855) Less: Volume in Environmentally Sensitive/Legally Restricted Areas (6,582) Merchantable Timber Inventory 67,584 (a) Table presented as of September 30, 2022 and does not include acquisitions completed in the fourth quarter.
The following table provides a breakdown of our Southern timberlands acreage and timber inventory by product and age class as of September 30, 2023: (volumes in thousands of SGT) (a) Age Class Acres (000’s) Pine Pulpwood Pine Sawtimber Hardwood Pulpwood Hardwood Sawtimber Total Pine Plantation 0 to 4 years (b) 291 — — — — — 5 to 9 years 203 — — — — — 10 to 14 years 187 6,974 1,695 43 — 8,712 15 to 19 years 237 12,287 6,118 136 1 18,542 20 to 24 years 205 8,167 8,236 158 4 16,565 25 to 29 years 66 2,278 4,147 89 3 6,517 30 + years 49 1,325 3,701 154 3 5,183 Total Pine Plantation 1,238 31,031 23,897 580 11 55,519 Natural Pine (Plantable) (c) 36 291 577 754 221 1,843 Natural Mixed Pine/Hardwood (d) 556 5,020 6,757 14,876 4,879 31,532 Forested Acres and Gross Inventory 1,830 36,342 31,231 16,210 5,111 88,894 Plus: Non-Forested Acres (e) 69 Gross Acres 1,899 Less: Pre-Merchantable Age Class Inventory (f) (9,445) Less: Volume in Environmentally Sensitive/Legally Restricted Areas (4,764) Merchantable Timber Inventory 74,685 (a) Table presented as of September 30, 2023 and does not include acquisitions or dispositions completed in the fourth quarter.
As of December 31, 2022, we do not have any surrender liabilities and all units are available to be freely monetized. See Note 23 - Other Assets for information about our cost basis in carbon credits. See Note 3 — Revenue for information about the sale of carbon units.
As of December 31, 2023, 415,608 NZUs have a surrender obligation in relation to the 2022 Final Emissions Return, of which 166,152 NZUs will be surrendered and the rest will be settled through a Fixed Price Option cash payment as allowed by the ETS. See Note 23 — Other Assets for information about our cost basis in carbon credits.
In New Zealand, we have a comprehensive safety management program that includes both employees and contractors pursuant to local laws and the Health & Safety at Work Act 2015. Similar industry practices and regulations do not exist in the United States for contractors.
However, for our contracted workforce, activities associated with tree felling, extraction of logs and log transportation are the most critical risk areas. In New Zealand, workplace safety is regulated by the Health and Safety at Work Act 2015. Our safety management program includes both contractors and employees pursuant to local laws.
We expect that the unique environmental attributes of our forestry assets will play an increasingly important role in our efforts to create value over time. • Apply Advanced Silviculture to Increase the Productivity of our Timberlands. We use our forestry expertise and disciplined financial approach to determine the appropriate silviculture programs and investments to maximize returns.
We expect that the environmental attributes of our forestry assets will play an increasingly important role in creating value over time. Our timberlands absorb significantly more carbon than we emit in our operations and position us to capitalize on the increasing demand for carbon solutions by companies, governments, and investors.
Our geographically diverse timberland holdings are strategically located in core softwood producing regions, including the U.S. South, U.S. Pacific Northwest and New Zealand. Our most significant timberland holdings are located in the U.S.
Our timberland holdings are strategically located in core softwood producing regions, many of which have favorable supply-demand dynamics that translate to superior cash flow generation per acre and per ton compared to industry benchmarks and other timberland owners. Our most significant timberland holdings are located in the U.S.
Removed
We are differentiated from other publicly-traded timberland REITs in that we are invested exclusively in timberlands and real estate and do not own any manufacturing assets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn particular, we regularly test our compliance with the REIT “asset tests,” which require generally that, at the close of each calendar quarter: (1) at least 75% of the market value of our total assets must consist of REIT-qualifying interests in real property (such as timberlands), including leaseholds and options to acquire real property and leaseholds, as well as cash and cash items and certain other specified assets, (2) no more than 25% of the market value of our total assets may consist of other assets that are not qualifying assets for purposes of the 75% test in clause (1) above, and (3) no more than 20% (25% for calendar years prior to 2018) of the market value of our total assets may consist of the securities of one or more “taxable REIT subsidiaries.” As of December 31, 2022, Rayonier is in compliance with these asset tests. 23 Table of Contents If in any taxable year we fail to qualify as a REIT and are not entitled to relief under the Code, we will not be allowed a deduction for dividends paid to shareholders in computing our taxable income and we will be subject to U.S. federal income tax on our REIT taxable income.
Biggest changeIn particular, we regularly test our compliance with the REIT “asset tests,” which require generally that, at the close of each calendar quarter: (1) at least 75% of the market value of our total assets must consist of REIT-qualifying interests in real property (such as timberlands), including leaseholds and options to acquire real property and leaseholds, as well as cash and cash items and certain other specified assets, (2) no more than 25% of the market value of our total assets may consist of other assets that are not qualifying assets for purposes of the 75% test in clause (1) above, and (3) no more than 20% of the market value of our total assets may consist of the securities of one or more “taxable REIT subsidiaries.” As of December 31, 2023, Rayonier is in compliance with these asset tests.
Energy costs are a significant operating expense for logging and hauling contractors who support us and the customers of our standing timber. The continued rapid rise in energy costs could have a negative effect on the cost and availability of such contractors.
Energy costs are a significant operating expense for logging and hauling contractors who support us and the customers of our standing timber. A continued rapid rise in energy costs could have a negative effect on the cost and availability of such contractors.
ECONOMIC RISK FACTORS A sustained increase in the rate of inflation, a persistent period of heightened inflation and monetary policy responses to the inflationary environment could negatively affect our stock price, results of operations and financial condition. The recent acceleration of inflation in the United States and global economies, should it persist, could adversely affect us.
ECONOMIC RISK FACTORS A sustained increase in the rate of inflation, a persistent period of heightened inflation and monetary policy responses to the inflationary environment could negatively affect our stock price, results of operations and financial condition. The acceleration of inflation in the United States and global economies, should it persist, could adversely affect us.
Additionally, such rapidly rising energy costs may have a negative impact on the cost of ocean freight for our exported products. Moreover, our selling, general and administrative costs could increase.
Additionally, rapidly rising energy costs may have a negative impact on the cost of ocean freight for our exported products. Moreover, our selling, general and administrative costs could increase.
Large-scale developments may involve commitments from government agencies or third parties related to the delivery of infrastructure improvements (such as roads, bridges, sidewalks, water, sewer and other utilities), the certainty and timing of which are outside of our control. 19 Table of Contents Changes in the laws, or interpretation or enforcement thereof, regarding the use and development of real estate, changes in the political composition of state and local governmental bodies, impacts from the ongoing COVID-19 pandemic, and the identification of new facts regarding our properties could lead to new or greater costs, delays and liabilities that could materially adversely affect our business, profitability or financial condition.
Large-scale developments may involve commitments from government agencies or third parties related to the delivery of infrastructure improvements (such as roads, bridges, sidewalks, water, sewer and other utilities), the certainty and timing of which are outside of our control. 19 Table of Contents Changes in the laws, or interpretation or enforcement thereof, regarding the use and development of real estate, changes in the political composition of state and local governmental bodies and the identification of new facts regarding our properties could lead to new or greater costs, delays and liabilities that could materially adversely affect our business, profitability or financial condition.
Demand for real estate can be affected by the availability of capital, changes in interest rates, availability and terms of financing, conditions in the credit markets generally, changes in governmental agencies, changes in developer confidence, actions by conservation organizations, actions by anti-development organizations, our ability to obtain land use entitlements and other permits necessary for our development activities, local real estate market economic conditions, competition from other sellers of land and real estate developers, the relative illiquidity of real estate investments, employment rates, new housing starts, the ongoing COVID-19 pandemic, population growth, demographics and federal, state and local land use, zoning and environmental protection laws or regulations (including any changes in laws or regulations).
Demand for real estate can be affected by the availability of capital, changes in interest rates, availability and terms of financing, conditions in the credit markets generally, changes in governmental agencies, changes in developer confidence, actions by conservation organizations, actions by anti-development organizations, our ability to obtain land use entitlements and other permits necessary for our development activities, local real estate market economic conditions, competition from other sellers of land and real estate developers, the relative illiquidity of real estate investments, employment rates, new housing starts, population growth, demographics and federal, state and local land use, zoning and environmental protection laws or regulations (including any changes in laws or regulations).
However, if for any reason our third-party operators are not able to honor their obligations to us, or if insurance is not in effect, then it is possible that we could be responsible for costs associated with environmental liabilities caused by such third-party operators. 22 Table of Contents The impact of existing regulatory restrictions on future harvesting activities may be significant.
However, if for any reason our third-party operators are not able to honor their obligations to us, or if insurance is not in effect, then it is possible that we could be responsible for costs associated with environmental liabilities caused by such third-party operators. The impact of existing regulatory restrictions on future harvesting activities may be significant.
In addition, the effects of the ongoing conflict could heighten certain of our other known risks described herein. OPERATIONAL RISK FACTORS Weather, climate change and other natural conditions may limit our timber harvest and sales.
In addition, the effects of the ongoing conflicts could heighten certain of our other known risks described herein. OPERATIONAL RISK FACTORS Weather, climate change and other natural conditions may limit our timber harvest and sales.
This would substantially reduce our cash available to pay distributions and the return on a unitholder and/or shareholder’s investment. Our cash dividends and Operating Partnership distributions are not guaranteed and may fluctuate. Generally, REITs are required to distribute 90% of their ordinary taxable income, but not their net capital gains income.
This would 23 Table of Contents substantially reduce our cash available to pay distributions and the return on a unitholder and/or shareholder’s investment. Our cash dividends and Operating Partnership distributions are not guaranteed and may fluctuate. Generally, REITs are required to distribute 90% of their ordinary taxable income, but not their net capital gains income.
Consequently, our dividend levels may fluctuate. Because our Operating Partnership distributions are aligned with the dividend, such distributions may also fluctuate. 24 Table of Contents Lack of shareholder ownership and transfer restrictions in our articles of incorporation may affect our ability to qualify as a REIT.
Consequently, our dividend levels may fluctuate. Because our Operating Partnership distributions are aligned with the dividend, such distributions may also fluctuate. Lack of shareholder ownership and transfer restrictions in our articles of incorporation may affect our ability to qualify as a REIT.
Such events could harm our reputation, negatively affect our customer relationships and adversely affect our business. 20 Table of Contents We are subject to risks associated with doing business outside of the U.S.
Such events could harm our reputation, negatively affect our customer relationships and adversely affect our business. We are subject to risks associated with doing business outside of the U.S.
The ongoing level of activity in these markets is subject to fluctuation due to future changes in economic conditions, inflation, interest rates, credit availability, population growth, weather conditions, the ongoing COVID-19 pandemic and other factors.
The ongoing level of activity in these markets is subject to fluctuation due to future changes in economic conditions, inflation, interest rates, credit availability, population growth, weather conditions, geopolitical tensions and other factors.
U.S. federal, state and local laws and regulations, as well as those of other countries, which are intended to protect threatened and endangered species, as well as waterways and wetlands, limit and may prevent timber harvesting, road building and other activities on our timberlands.
U.S. federal, state and local laws and regulations, as well as those of other countries, which are intended to protect threatened and endangered species, as well as waterways and wetlands, limit and may prevent timber harvesting, road building, our participation in markets for carbon offsets and carbon storage and other activities on our timberlands.
While we do not expect our operations to be directly impacted by the conflict at this time, changes in global wood and commodity flows could impact the markets in which we operate, which may in turn negatively impact our business, results of operations, supply chain and financial condition.
While we do not expect our operations to be directly impacted by these conflicts at this time, changes in the cost of ocean freight, and changes in global wood and commodity flows, especially energy commodities, could impact the markets in which we operate, which may in turn negatively impact our business, results of operations, supply chain and financial condition.
Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions; • trade protection laws, policies and measures and other regulatory requirements affecting trade and investment, including loss or modification of exemptions for taxes and tariffs, imposition of new tariffs and duties and import and export licensing requirements; • continuing negative impacts from the imposition and/or threatened imposition of substantial tariffs on forest products imports into China in connection with trade tensions between China and the U.S.; • business disruptions arising from public health crises and outbreaks of communicable diseases, especially in China, including the outbreak of the virus known as the novel coronavirus; • difficulty in establishing, staffing and managing non-U.S. operations; • product damage or losses incurred during shipping; • potentially negative consequences from changes in or interpretations of tax laws; • economic or political instability, inflation, recessions and interest rate and exchange rate fluctuations; and • uncertainties regarding non-U.S. judicial systems, rules and procedures; These risks could adversely affect our business, financial condition and results of operations.
Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions; • trade protection laws, policies and measures and other regulatory requirements affecting trade and investment, including loss or modification of exemptions for taxes and tariffs, imposition of new tariffs and duties and import and export licensing requirements; • continuing negative impacts from the imposition and/or threatened imposition of substantial tariffs on forest products imports into China in connection with trade tensions between China and the U.S.; • business disruptions arising from public health crises and outbreaks of communicable diseases, especially in China; • business disruptions arising from geopolitical tensions, especially between China and the United States; • difficulty in establishing, staffing and managing non-U.S. operations; • product damage or losses incurred during shipping; • potentially negative consequences from changes in or interpretations of tax laws; • economic or political instability, inflation, recessions and interest rate and exchange rate fluctuations; and • uncertainties regarding non-U.S. judicial systems, rules and procedures; These risks could adversely affect our business, financial condition and results of operations. 20 Table of Contents Our estimates of timber inventories and growth rates may be inaccurate, which could impair our ability to realize expected revenues.
Global log and lumber markets have exhibited increased volatility as sanctions have been imposed on Russia by the United States, the United Kingdom and the European Union in response to Russia’s invasion of Ukraine.
The duration and outcomes of these conflicts and their residual effects are uncertain. Global log and lumber markets have exhibited increased volatility as sanctions have been imposed on Russia by the United States, the United Kingdom and the European Union in response to Russia’s invasion of Ukraine.
We lease and/or grant easements across some of our properties to third-party operators for the purpose of operating communications towers, generating renewable energy (wind and solar), operating pipelines for the transport of gases and liquids, and exploring, extracting, developing and producing oil, gas, rock and other minerals. These activities are subject to federal, state and local laws and regulations.
We lease and/or grant easements across some of our properties to third-party operators for the purpose of operating communications towers, generating renewable energy (wind and solar), operating pipelines for the transport of gases and liquids, conducting carbon capture and storage operations and exploring, extracting, developing and producing oil, gas, rock and other minerals.
These laws and regulations may relate to, among other things, the protection of timberlands and endangered species, recreation and aesthetics, protection and restoration of natural resources, surface water quality, timber harvesting practices, and remedial standards for contaminated property and groundwater.
These changes may adversely affect our ability to harvest and sell timber, remediate contaminated properties and/or entitle real estate. These laws and regulations may relate to, among other things, the protection of timberlands and endangered species, recreation and aesthetics, protection and restoration of natural resources, surface water quality, timber harvesting practices, and remedial standards for contaminated property and groundwater.
If the assumptions we rely upon change or these estimates are inaccurate, our ability to manage our timberlands in a sustainable or profitable manner may be diminished, which may cause our results of operations and our stock price to be adversely affected. 21 Table of Contents Our businesses are subject to extensive environmental laws and regulations that may restrict or adversely affect our ability to conduct our business.
If the assumptions we rely upon change or these estimates are inaccurate, our ability to manage our timberlands in a sustainable or profitable manner may be diminished, which may cause our results of operations and our stock price to be adversely affected.
In addition, some stakeholders may disagree with Rayonier’s initiatives and the focus of stakeholders may change and evolve over time. Stakeholders also may have very different views on where environmental, social and governance focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
Stakeholders also may have very different views on where environmental, social and governance focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict between Russia and Ukraine. The global economy has been negatively impacted by the military conflict between Russia and Ukraine. The Russia-Ukraine conflict is fast-moving and uncertain.
Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflicts and geopolitical tensions. The global economy has been negatively impacted by the military conflicts between Russia and Ukraine, as well as in the Middle East.
Our estimates of timber inventories and growth rates may be inaccurate, which could impair our ability to realize expected revenues. We rely upon estimates of merchantable timber inventories (which include judgments regarding inventories that may be lawfully and economically harvested), timber growth rates and end-product yields when acquiring and managing working forests.
We rely upon estimates of merchantable timber inventories (which include judgments regarding inventories that may be lawfully and economically harvested), timber growth rates and end-product yields when acquiring and managing working forests. These estimates, which are inherently inexact and uncertain in nature, are central to forecasting our anticipated timber revenues and expected cash flows.
Environmental laws and regulations are constantly changing and are generally becoming more restrictive. Laws, regulations and related judicial decisions and administrative interpretations affecting our business are subject to change, and new laws and regulations are frequently enacted. These changes may adversely affect our ability to harvest and sell timber, remediate contaminated properties and/or entitle real estate.
Our businesses are subject to extensive environmental laws and regulations that may restrict or adversely affect our ability to conduct our business. Environmental laws and regulations are constantly changing and are generally becoming more restrictive. Laws, regulations and related judicial decisions and administrative interpretations affecting our business are subject to change, and new laws and regulations are frequently enacted.
Accordingly, our timber harvesting volumes and realized margins have been negatively impacted in certain markets. As demand for timber accelerated with the recovery in U.S. and New Zealand housing starts, the lack of adequate supply of logging contractors resulted in sharp increases in logging costs and at times slowed deliveries.
As demand for timber accelerated with the recovery in U.S. and New Zealand housing starts during and following the COVID-19 pandemic, the lack of adequate supply of logging contractors resulted in sharp increases in logging costs and at times slowed deliveries.
Among the remedies that could be enforced in a lawsuit is a judgment preventing or restricting harvesting on a portion of our timberlands. Third-party operators may create environmental liabilities.
Any threatened or actual lawsuit could delay harvesting on our timberlands, affect how we operate or limit our ability to 21 Table of Contents modify or invest in our real estate. Among the remedies that could be enforced in a lawsuit is a judgment preventing or restricting harvesting on a portion of our timberlands. Third-party operators may create environmental liabilities.
We continue to monitor political and regulatory developments in this area, but their overall impact on Rayonier, from a cost, benefit and financial performance standpoint, remains uncertain at this time. In addition, the EPA has yet to finalize the treatment of biomass under greenhouse gas regulatory schemes, leaving Rayonier’s biomass customers in a position of uncertainty.
We continue to monitor political and regulatory developments in this area, but their overall impact on Rayonier, from a cost, benefit and financial performance standpoint, remains uncertain at this time.
In addition to intervention in regulatory proceedings, interested groups and individuals may file or threaten to file lawsuits that seek to prevent us from obtaining permits, implementing capital improvements or pursuing operating plans. Any threatened or actual lawsuit could delay harvesting on our timberlands, affect how we operate or limit our ability to modify or invest in our real estate.
In addition to intervention in regulatory proceedings, interested groups and individuals may file or threaten to file lawsuits that seek to prevent us from obtaining permits, implementing capital improvements or pursuing operating plans.
These operations may also create risk of environmental liabilities for an unlawful discharge of oil, gas, chemicals or other materials into the air, soil or water. Generally, these third-party operators indemnify us against any such liability, and we require that they maintain liability insurance to the extent practical to do so.
Generally, these third-party operators indemnify us against any such liability, and we require that they maintain liability insurance to the extent practical to do so.
Expectations relating to environmental, social and governance considerations expose Rayonier to potential liabilities, increased costs, reputational harm and other adverse effects on Rayonier’s business. Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including greenhouse gas emissions, human capital and diversity, equity and inclusion.
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including greenhouse gas emissions, human capital and diversity, equity and inclusion. Rayonier makes statements about these matters through information provided on its website, press releases and other communications, including through its Sustainability and Carbon Reports.
Rayonier makes statements about these matters through information provided on its website, press releases and other communications, including through its Sustainability and Carbon Reports. Responding to these environmental, social and governance considerations involves risks and uncertainties, including those described under “Forward-Looking Statements,” requires investments and is impacted by factors that may be outside Rayonier’s control.
Responding to these environmental, social and governance considerations involves risks and uncertainties, including those described under “Forward-Looking Statements,” requires investments and is impacted by factors that may be outside Rayonier’s control. In addition, some stakeholders may disagree with Rayonier’s initiatives and the focus of stakeholders may change and evolve over time.
During the global COVID-19 pandemic, we have experienced disruptions in the supply, and rapid inflation in the cost, of transportation and labor in connection with timber harvesting and delivery. Tight job markets have increased the difficulty and cost of attracting and retaining sufficient skilled labor for logging and transportation.
Tight job markets have increased the difficulty and cost of attracting and retaining sufficient skilled labor for logging and transportation. Accordingly, our timber harvesting volumes and realized margins have been negatively impacted in certain markets.
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Coronavirus (COVID-19) Pandemic. The novel coronavirus (COVID-19) outbreak could materially adversely affect our financial condition and results of operations. Epidemics, pandemics or other such crises or public health concerns in regions of the world where we have operations or sell products, could result in the disruption of our business.
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Additionally, the conflict and related hostilities in the Middle East have increased the potential for disruptions to shipping in the Red Sea, affected the cost and availability of ocean freight providers and elevated US military operations in the region.
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Specifically, the ongoing COVID-19 outbreak has resulted in increased travel restrictions and extended shutdowns of certain businesses around the world, as well as continued volatility in economic conditions.
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These activities are subject to federal, state and local laws and regulations. These operations may also create risk of environmental liabilities for an unlawful discharge of oil, gas, chemicals or other materials into the air, soil or water.
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These or any governmental or other regulatory developments or health concerns in countries in which we operate or export to, especially China, could result in operational restrictions or social and economic instability, or labor shortages.
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We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.
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Infections may continue to spread or certain areas may experience outbreaks due to new variants or otherwise, which could limit our ability to timely harvest, sell and transport our timber, increase our costs, restrict our operations or cause supply chain disruptions for us and our customers.
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We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information and to manage or support a variety of our business processes, including financial transactions and maintenance of records, which may include confidential information.
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Any of these developments could have a negative impact on our business, financial condition and operating results.
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We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing confidential information, such as personally identifiable information.
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In addition, the COVID-19 pandemic could continue to adversely affect the economies and markets of certain countries, resulting in further economic volatility that could have an adverse effect on our business, operating results and financial condition, as well as market value of our securities.
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Although we have taken steps to protect the security of the data maintained in our information systems, it is possible that our security measures and those of our information technology vendors will not be able to prevent the systems’ improper functioning or the improper disclosure of personally identifiable information, such as in the event of cyber-attacks.
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Further, our customers may be negatively impacted due to disruptions in business and operating conditions and constraints on their own liquidity and access to capital relating to COVID-19, which could increase our counterparty credit exposure.
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Security breaches, including physical or 22 Table of Contents electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information.
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These estimates, which are inherently inexact and uncertain in nature, are central to forecasting our anticipated timber revenues and expected cash flows.
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Any failure to maintain proper function, security and availability of our information systems and those of our information technology vendors could interrupt our operations, damage our reputation, or subject us to liability claims or regulatory penalties, any one of which could materially and adversely affect our financial condition and results of operations.
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If in any taxable year we fail to qualify as a REIT and are not entitled to relief under the Code, we will not be allowed a deduction for dividends paid to shareholders in computing our taxable income and we will be subject to U.S. federal income tax on our REIT taxable income.
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In addition, the EPA has yet to finalize the treatment of biomass under greenhouse gas regulatory schemes, leaving Rayonier’s biomass customers in a position of uncertainty. 24 Table of Contents Expectations relating to environmental, social and governance considerations expose Rayonier to potential liabilities, increased costs, reputational harm and other adverse effects on Rayonier’s business.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, legal acres in New Zealand were comprised of 297,000 plantable acres and 120,000 non-productive acres. 26 Table of Contents The following tables detail changes in our portfolio of owned and leased timberlands by state from December 31, 2021 to December 31, 2022: (acres in 000s) Acres Owned December 31, 2021 Acquisitions Sales December 31, 2022 Southern Alabama 223 36 (1) 258 Florida 350 1 (4) 347 Georgia 619 29 (1) 647 Louisiana 140 9 (1) 148 Oklahoma 92 — (1) 91 South Carolina 16 — — 16 Texas 225 65 (5) 285 1,665 140 (13) 1,792 Pacific Northwest Oregon 61 — — 61 Washington 425 — (15) 410 486 — (15) 471 New Zealand (a) 187 1 — 188 Total 2,338 141 (28) 2,451 (a) Represents legal acres owned by the New Zealand subsidiary, in which Rayonier has a 77% interest.
Biggest changeAs of December 31, 2023, legal acres in New Zealand were comprised of 297,000 plantable acres and 124,000 non-productive acres. 27 Table of Contents The following tables detail changes in our portfolio of owned and leased timberlands by state from December 31, 2022 to December 31, 2023: (acres in 000s) Acres Owned December 31, 2022 Acquisitions Sales Other (a) December 31, 2023 Southern Alabama 258 — (7) (1) 250 Florida 347 2 (3) 15 361 Georgia 647 — (12) (23) 612 Louisiana 148 — (1) — 147 Oklahoma 91 — — — 91 South Carolina 16 — — — 16 Texas 285 1 (5) 1 282 1,792 3 (28) (8) 1,759 Pacific Northwest Oregon 61 — (55) — 6 Washington 410 — (2) — 408 471 — (57) — 414 New Zealand (b) 188 — — — 188 Total 2,451 3 (85) (8) 2,361 (a) Includes adjustments for land mapping reviews.
(b) Represents capitalized and expensed lease payments. (c) Primarily timber reservations acquired in the merger with Pope Resources for which no lease payments are made. (d) Excludes lump sum payments. (e) Based on the year-end foreign exchange rate. OTHER NON-TIMBERLAND LEASES See Note 16 - Leases for information on other non-timberland leases.
(b) Represents capitalized and expensed lease payments. (c) Primarily timber reservations acquired in the merger with Pope Resources for which no lease payments are made. (d) Excludes lump sum payments. (e) Based on the year-end foreign exchange rate. OTHER NON-TIMBERLAND LEASES See Note 16 — Leases for information on other non-timberland leases. 29 Table of Contents
Item 2. PROPERTIES Our timber operations are comprised of our core timberland holdings, which are disaggregated into three geographically distinct reporting segments: Southern Timber, Pacific Northwest Timber and New Zealand Timber.
Item 2. PROPERTIES Our timber operations are disaggregated into three geographically distinct reporting segments: Southern Timber, Pacific Northwest Timber and New Zealand Timber.
(b) Primarily timber reservations acquired in the merger with Pope Resources. (c) Represents legal acres leased by the New Zealand subsidiary, in which Rayonier has a 77% interest. 27 Table of Contents TIMBERLAND LEASES & DEEDS See Note 16 - Leases for more information on U.S. and New Zealand timberland leases including lease terms and renewal provisions.
(d) Represents legal acres leased by the New Zealand subsidiary, in which Rayonier has a 77% interest. 28 Table of Contents TIMBERLAND LEASES & DEEDS See Note 16 — Leases for more information on U.S. and New Zealand timberland leases including lease terms and renewal provisions.
(acres in 000s) Acres Leased December 31, 2021 New Leases Sold/Expired Leases (a) December 31, 2022 Southern Alabama 14 — — 14 Arkansas 4 — (2) 2 Florida 51 — (4) 47 Georgia 64 — — 64 133 — (6) 127 Pacific Northwest Washington (b) 4 — (1) 3 New Zealand (c) 232 — (3) 229 Total 369 — (10) 359 (a) Includes acres previously under lease that have been harvested and activity for the relinquishment of leased acres.
(acres in 000s) Acres Leased December 31, 2022 New Leases Sold/Expired Leases (a) Other (b) December 31, 2023 Southern Alabama 14 — (9) — 5 Arkansas 2 — — — 2 Florida 47 — (14) 3 36 Georgia 64 — (15) 1 50 127 — (38) 4 93 Pacific Northwest Washington (c) 3 — — 1 4 New Zealand (d) 229 1 — 3 233 Total 359 1 (38) 8 330 (a) Includes acres previously under lease that have been harvested and activity for the relinquishment of leased acres.
The following table details our acres under lease as of December 31, 2022 by type of lease and estimated lease expiration: (acres in 000s) Lease Expiration Location Type of Lease Total 2023-2032 2033-2042 2043-2052 Thereafter Southern Fixed Term 117 73 38 — 6 Fixed Term with Renewal Option (a) 10 3 7 — — Pacific Northwest Fixed Term (b) 3 — 2 1 — New Zealand CFL - Perpetual (c) 75 — — — 75 CFL - Fixed Term (c) 3 — — — 3 CFL - Terminating (c) 11 1 — 8 2 Forestry Right (c) 124 35 4 6 79 Fixed Term Land Leases 16 — — 2 14 Total Acres under Long-term Leases 359 112 51 17 179 (a) Includes approximately 2,000 acres of timber deeds.
The following table details our acres under lease as of December 31, 2023 by type of lease and estimated lease expiration: (acres in 000s) Lease Expiration Location Type of Lease Total 2024-2033 2034-2043 2044-2053 Thereafter Southern Fixed Term 83 42 35 — 6 Fixed Term with Renewal Option (a) 10 10 — — — Pacific Northwest Fixed Term (b) 4 1 2 1 — New Zealand CFL - Perpetual (c) 75 — — — 75 CFL - Fixed Term (c) 3 — — — 3 CFL - Terminating (c) 11 1 — 8 2 Forestry Right (c) 128 35 4 7 82 Fixed Term Land Leases 16 — — 2 14 Total Acres under Long-term Leases 330 89 41 18 182 (a) Includes approximately 2,000 acres of timber deeds.
The following table details our estimated leased acres, lease expirations and lease costs over the next five years: (acres and dollars in 000s, except per acre amounts) Location 2023 2024 2025 2026 2027 Southern Leased Acres Expiring (a) 35 2 24 — 11 Year-end Leased Acres (a) 92 90 66 66 55 Estimated Annual Lease Cost (a)(b) $4,285 $3,579 $3,551 $2,987 $2,925 Average Lease Cost per Acre (a) $37.69 $42.10 $41.99 $49.68 $49.50 Pacific Northwest Leased Acres Expiring — — — — — Year-End Leased Acres (c) 3 3 3 3 3 New Zealand Leased Acres Expiring — — 1 10 — Year-end Leased Acres 229 229 228 218 218 Estimated Annual Lease Cost (b)(e) $4,762 $4,762 $4,762 $4,748 $4,748 Average Lease Cost per Acre (d)(e) $25.91 $25.91 $25.91 $25.90 $25.90 (a) Includes timber deeds.
The following table details our estimated leased acres, lease expirations and lease costs over the next five years: (acres and dollars in 000s, except per acre amounts) Location 2024 2025 2026 2027 2028 Southern Leased Acres Expiring (a) 2 27 — 11 — Year-end Leased Acres (a) 91 64 64 53 53 Estimated Annual Lease Cost (a)(b) $3,585 $3,554 $2,952 $2,903 $2,483 Average Lease Cost per Acre (a) $41.90 $41.79 $50.44 $50.30 $52.31 Pacific Northwest Leased Acres Expiring — — — — — Year-End Leased Acres (c) 4 4 4 4 4 New Zealand Leased Acres Expiring — 1 10 — — Year-end Leased Acres 233 232 222 222 222 Estimated Annual Lease Cost (b)(e) $4,765 $4,765 $4,762 $4,759 $4,759 Average Lease Cost per Acre (d)(e) $26.59 $26.59 $26.59 $26.59 $26.59 (a) Includes timber deeds.
The following table provides a breakdown of our timberland holdings as of September 30, 2022 and December 31, 2022: Core Timberland Holdings (acres in 000s) As of September 30, 2022 As of December 31, 2022 Owned Leased Total Owned Leased Total Southern Alabama 223 14 237 258 14 272 Arkansas — 4 4 — 2 2 Florida 348 51 399 347 47 394 Georgia 618 64 682 647 64 711 Louisiana 139 — 139 148 — 148 Oklahoma 91 — 91 91 — 91 South Carolina 16 — 16 16 — 16 Texas 221 — 221 285 — 285 1,656 133 1,789 1,792 127 1,919 Pacific Northwest Oregon 61 — 61 61 — 61 Washington 421 4 425 410 3 413 482 4 486 471 3 474 New Zealand (a) 187 230 417 188 229 417 Total 2,325 367 2,692 2,451 359 2,810 (a) Represents legal acres owned and leased by the New Zealand subsidiary, in which Rayonier owns a 77% interest.
The following table provides a breakdown of our timberland holdings as of September 30, 2023 and December 31, 2023: (acres in 000s) As of September 30, 2023 As of December 31, 2023 Owned Leased Total Owned Leased Total Southern Alabama 256 5 261 250 5 255 Arkansas — 2 2 — 2 2 Florida 362 50 412 361 36 397 Georgia 623 65 688 612 50 662 Louisiana 147 — 147 147 — 147 Oklahoma 91 — 91 91 — 91 South Carolina 16 — 16 16 — 16 Texas 282 — 282 282 — 282 1,777 122 1,899 1,759 93 1,852 Pacific Northwest Oregon 61 — 61 6 — 6 Washington 410 3 413 408 4 412 471 3 474 414 4 418 New Zealand (a) 188 231 419 188 233 421 Total 2,436 356 2,792 2,361 330 2,691 (a) Represents legal acres owned and leased by the New Zealand subsidiary, in which Rayonier owns a 77% interest.
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(b) Represents legal acres owned by the New Zealand subsidiary, in which Rayonier has a 77% interest.
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(b) Includes adjustments for land mapping reviews. (c) Primarily timber reservations acquired in the merger with Pope Resources.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUNREGISTERED SALES OF EQUITY SECURITIES From time to time, the Company may issue shares of common stock in exchange for units in the Operating Partnership. Such shares are issued based on an exchange ratio of one common share for each unit in the Operating Partnership.
Biggest changeHOLDERS Including institutional holders, there were approximately 4,371 shareholders of record of our common shares on February 16, 2024. REGISTERED SALES OF EQUITY SECURITIES From time to time, the Company may issue common shares in exchange for units in the Operating Partnership.
ISSUER PURCHASES OF EQUITY SECURITIES Pursuant to the Operating Partnership’s limited partnership agreement, limited partners have the right to redeem their Operating Partnership units for cash, or at our election, shares of Rayonier Common Stock on a one-for-one basis.
ISSUER REPURCHASES OF EQUITY SECURITIES Pursuant to the Operating Partnership’s limited partnership agreement, limited partners have the right to redeem their Operating Partnership units for cash, or at our election, shares of Rayonier Common Stock on a one-for-one basis.
ISSUER REPURCHASES In February 2016, the Board of Directors approved the repurchase of up to $100 million of Rayonier’s common shares (the “share repurchase program”) to be made at management’s and the Board of Directors’ discretion. The program has no time limit and may be suspended or discontinued at any time.
ISSUER REPURCHASES OF EQUITY SECURITIES In February 2016, the Board of Directors approved the repurchase of up to $100 million of Rayonier’s common shares (the “share repurchase program”) to be made at management’s discretion. The program has no time limit and may be suspended or discontinued at any time.
During the quarter ended December 31, 2022, 2,500 Operating Partnership units held by limited partners were redeemed in exchange for shares of Rayonier Common Stock. 31 Table of Contents STOCK PERFORMANCE GRAPH The following graph compares the performance of Rayonier’s common shares (assuming reinvestment of dividends) with a broad-based market index (Standard & Poor’s (“S&P”) 500), and two industry-specific indices – the S&P Global Timber and Forestry Index and the FTSE NAREIT All Equity REIT Index.
During the quarter ended December 31, 2023, 9,371 Operating Partnership units held by limited partners were redeemed in exchange for shares of Rayonier Common Shares. 32 Table of Contents STOCK PERFORMANCE GRAPH The following graph compares the performance of Rayonier’s common shares (assuming reinvestment of dividends) with a broad-based market index (Standard & Poor’s (“S&P”) 500), and two industry-specific indices – the S&P Global Timber and Forestry Index and the FTSE NAREIT All Equity REIT Index.
UNREGISTERED SALES OF EQUITY SECURITIES There were no unregistered sales of equity securities made by the Operating Partnership during the quarter ended December 31, 2022.
UNREGISTERED SALES OF EQUITY SECURITIES There were no unregistered sales of equity securities made by the Operating Partnership during the quarter ended December 31, 2023.
HOLDERS Including institutional holders, there were approximately 15 holders of record of our Operating Partnership units (other than the Company) on February 17, 2023. DISTRIBUTIONS The distribution rate on the Operating Partnership’s units is equal to the dividend rate on Rayonier Inc.’s common shares.
HOLDERS Including institutional holders, there were approximately 15 holders of record of our Operating Partnership units (other than the Company) on February 16, 2024. DISTRIBUTIONS The distribution rate on the Operating Partnership’s units is equal to the dividend rate on Rayonier Inc.’s common shares.
(b) Maximum number of shares authorized to be purchased at the end of October, November and December are based on month-end closing stock prices of $33.70, $35.88 and $32.96, respectively. 30 Table of Contents Rayonier, L.P. MARKET FOR UNITS OF THE OPERATING PARTNERSHIP There is no public trading market for Operating Partnership units.
(b) Maximum number of shares authorized to be purchased at the end of October, November and December are based on month-end closing stock prices of $25.24, $30.68 and $33.41, respectively. 31 Table of Contents Rayonier, L.P. MARKET FOR UNITS OF THE OPERATING PARTNERSHIP There is no public trading market for Operating Partnership units.
The following table provides information regarding our purchases of Rayonier common shares during the quarter ended December 31, 2022: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (b) October 1 to October 31 — — — 2,603,218 November 1 to November 30 — — — 2,445,051 December 1 to December 31 — — — 2,661,664 Total — — (a) Purchases made in open-market transactions under the $100 million share repurchase program announced on February 10, 2016.
The following table provides information regarding our purchases of Rayonier common shares during the quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (c) October 1 to October 31 — — — 3,475,770 November 1 to November 30 — — — 2,859,467 December 1 to December 31 — — — 2,625,814 Total — — (a) Purchases made in open-market transactions under the $100 million share repurchase program announced on February 10, 2016.
There were no shares repurchased under this program in the fourth quarter of 2022. As of December 31, 2022, there was $87.7 million, or approximately 2,661,664 shares based on the period-end closing stock price of $32.96, remaining under this program.
There were no shares repurchased under this program in the fourth quarter of 2023. As of December 31, 2023, there was $87.7 million, or approximately 2,625,814 shares based on the period-end closing stock price of $33.41, remaining under this program.
During the quarter ended December 31, 2022, the Company issued 2,500 common shares in exchange for an equal number of units in the Operating Partnership pursuant to the Operating Partnership agreement.
Such shares are issued based on an exchange ratio of one common share for each unit in the Operating Partnership. During the quarter ended December 31, 2023, the Company issued 9,371 common shares in exchange for an equal number of units in the Operating Partnership pursuant to the Operating Partnership agreement.
The data in the following table was used to create the above graph as of December 31: 2017 2018 2019 2020 2021 2022 Rayonier Inc. $100 $90 $111 $104 $147 $124 S&P 500 ® Index 100 96 126 149 192 157 S&P ® Global Timber and Forestry Index 100 80 93 111 127 100 FTSE NAREIT All Equity REIT Index 100 92 114 105 144 103
The data in the following table was used to create the above graph as of December 31: 2018 2019 2020 2021 2022 2023 Rayonier Inc. $100 $123 $115 $163 $137 $145 S&P 500 ® Index 100 131 156 200 164 207 S&P ® Global Timber and Forestry Index 100 116 137 158 124 137 FTSE NAREIT All Equity REIT Index 100 124 114 157 112 121
DIVIDENDS Common stock cash dividends during the years ended December 31, 2022, 2021 and 2020 aggregated to $1.125, $1.08 and $1.08, respectively. HOLDERS Including institutional holders, there were approximately 4,606 shareholders of record of our common shares on February 17, 2023.
DIVIDENDS Common share cash dividends during the years ended December 31, 2023, 2022 and 2021 aggregated to $1.34, $1.125 and $1.08, respectively. The year ended December 31, 2023 includes an additional cash dividend of $0.20 per common share, which was payable January 12, 2024 to shareholders of record on December 29, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(f) Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. 53 Table of Contents The following tables provide a reconciliation of Operating Income (Loss) by segment to Adjusted EBITDA by segment for the three years ended December 31 (in millions of dollars): Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Corporate and Other Total 2022 Operating income $96.6 $15.2 $30.6 — $58.5 $0.4 ($35.5) $165.8 Add: Depreciation, depletion and amortization 60.3 48.0 23.9 — 13.9 — 1.3 147.3 Add: Non-cash cost of land and improved development — — — — 28.4 — — 28.4 Add: Timber write-offs resulting from a casualty event (a) — 0.7 — — — — — 0.7 Less: Gain associated with the multi-family apartment complex sale attributable to NCI (b) — — — — (11.5) — — (11.5) Less: Large Dispositions (c) — — — — (16.6) — — (16.6) Adjusted EBITDA $156.9 $63.9 $54.5 — $72.7 $0.4 ($34.2) $314.2 2021 Operating income $66.1 $6.8 $51.5 $63.3 $112.5 $0.1 ($30.6) $269.8 Add: Depreciation, depletion and amortization 54.1 50.5 27.0 2.4 7.9 — 1.2 143.2 Add: Non-cash cost of land and improved development — — — — 25.0 — — 25.0 Less: Operating income attributable to NCI in Timber Funds (d) — — — (45.6) — — — (45.6) Less: Gain on investment in Timber Funds (e) — — — (7.5) — — — (7.5) Less: Fund II Timberland Dispositions attributable to Rayonier (f) — — — (10.3) — — — (10.3) Less: Large Dispositions (c) — — — — (44.8) — — (44.8) Adjusted EBITDA $120.2 $57.3 $78.5 $2.3 $100.7 $0.1 ($29.4) $329.8 2020 Operating income (loss) $41.3 ($10.0) $30.0 ($13.2) $72.0 ($0.5) ($45.2) $74.4 Add: Operating loss attributable to NCI in Timber Funds (d) — — — 11.6 — — — 11.6 Add: Timber write-offs resulting from a casualty event attributable to Rayonier (a) 6.0 — — 1.8 — — — 7.9 Add: Costs related to the merger with Pope Resources (g) — — — — — — 17.2 17.2 Add: Depreciation, depletion and amortization 61.8 47.1 25.0 1.6 17.7 — 1.4 154.7 Add: Non-cash cost of land and improved development — — — — 30.4 — — 30.4 Less: Large Dispositions (c) — — — — (28.7) — — (28.7) Adjusted EBITDA $109.1 $37.1 $55.0 $1.8 $91.4 ($0.5) ($26.6) $267.4 (a) Timber write-offs resulting from a casualty event includes the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events which cannot be salvaged.
Biggest change(f) Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not reflect a demonstrable premium relative to timberland value. 54 Table of Contents The following tables provide a reconciliation of Operating Income (Loss) by segment to Adjusted EBITDA by segment for the three years ended December 31 (in millions of dollars): Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Corporate and Other Total 2023 Operating income (loss) $76.3 ($9.0) $26.0 — $156.6 $0.5 ($39.1) $211.3 Add: Depreciation, depletion and amortization 80.0 36.9 21.7 — 18.0 — 1.7 158.2 Add: Non-cash cost of land and improved development — — — — 29.8 — — 29.8 Add: Timber write-offs resulting from casualty events (a) — — 2.3 — — — — 2.3 Less: Large Dispositions (b) — — — — (105.1) — — (105.1) Adjusted EBITDA $156.2 $27.9 $50.0 — $99.3 $0.5 ($37.4) $296.5 2022 Operating income $96.6 $15.2 $30.6 — $58.5 $0.4 ($35.5) $165.8 Add: Depreciation, depletion and amortization 60.3 48.0 23.9 — 13.9 — 1.3 147.3 Add: Non-cash cost of land and improved development — — — — 28.4 — — 28.4 Add: Timber write-offs resulting from casualty events (a) — 0.7 — — — — — 0.7 Less: Gain associated with the multi-family apartment complex sale attributable to NCI (c) — — — — (11.5) — — (11.5) Less: Large Dispositions (b) — — — — (16.6) — — (16.6) Adjusted EBITDA $156.9 $63.9 $54.5 — $72.7 $0.4 ($34.2) $314.2 2021 Operating income $66.1 $6.8 $51.5 $63.3 $112.5 $0.1 ($30.6) $269.8 Add: Depreciation, depletion and amortization 54.1 50.5 27.0 2.4 7.9 — 1.2 143.2 Add: Non-cash cost of land and improved development — — — — 25.0 — — 25.0 Less: Operating income attributable to NCI in Timber Funds (d) — — — (45.6) — — — (45.6) Less: Gain on investment in Timber Funds (e) — — — (7.5) — — — (7.5) Less: Fund II Timberland Dispositions attributable to Rayonier (f) — — — (10.3) — — — (10.3) Less: Large Dispositions (b) — — — — (44.8) — — (44.8) Adjusted EBITDA $120.2 $57.3 $78.5 $2.3 $100.7 $0.1 ($29.4) $329.8 (a) Timber write-offs resulting from casualty events include the write-off of and adjustments of merchantable and pre-merchantable timber volume damaged by casualty events that cannot be salvaged.
Our revenues, operating income and cash flows are primarily derived from the following core business segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate and Trading. We own or lease under long-term agreements approximately 2.4 million acres of timberland and real estate in Alabama, Arkansas, Florida, Georgia, Louisiana, Oklahoma, Oregon, South Carolina, Texas and Washington.
Our revenues, operating income and cash flows are primarily derived from the following core business segments: Southern Timber, Pacific Northwest Timber, New Zealand Timber, Real Estate and Trading. We own or lease under long-term agreements approximately 2.3 million acres of timberland and real estate in Alabama, Arkansas, Florida, Georgia, Louisiana, Oklahoma, Oregon, South Carolina, Texas and Washington.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OBJECTIVE The objective of the Management’s Discussion and Analysis is to detail material information, events, uncertainties and other factors impacting the Company and the Operating Partnership and to provide investors an understanding of “Management’s perspective.” Item 7, Management’s Discussion and Analysis (MD&A) highlights the critical areas for evaluating the Company’s performance which includes a discussion on the reportable segments, liquidity and capital, and critical accounting estimates.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OBJECTIVE The objective of the Management’s Discussion and Analysis is to detail material information, events, uncertainties and other factors impacting the Company and the Operating Partnership and to provide investors an understanding of “Management’s perspective.” Item 7, Management’s Discussion and Analysis (MD&A) highlights the critical areas for evaluating our performance which includes a discussion on the reportable segments, liquidity and capital, and critical accounting estimates.
We also have a 77% ownership interest in Matariki Forestry Group, a joint venture (“New Zealand subsidiary”), that owns or leases approximately 417,000 gross acres (297,000 net plantable acres) of timberlands in New Zealand. Across our timberland management segments, we sell standing timber (primarily at auction to third parties) and delivered logs.
We also have a 77% ownership interest in Matariki Forestry Group, a joint venture (“New Zealand subsidiary”), that owns or leases approximately 421,000 gross acres (297,000 net plantable acres) of timberlands in New Zealand. Across our timberland management segments, we sell standing timber (primarily at auction to third parties) and delivered logs.
We believe we are the second largest publicly-traded timberland REIT and the fourth largest private timberland owner in the United States. Our Real Estate business manages all property sales and seeks to maximize the value of our properties that are more valuable for development, recreational or residential uses than for growing timber, and opportunistically sells non-strategic timberlands.
We believe we are the second largest publicly-traded timberland REIT and the third largest private timberland owner in the United States. Our Real Estate business manages all property sales and seeks to maximize the value of our properties that are more valuable for development, recreational or residential uses than for growing timber, and opportunistically sells non-strategic timberlands.
(b) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. (c) Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. (d) Excludes Large Dispositions.
(b) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. (c) Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not reflect a demonstrable premium relative to timberland value. (d) Excludes Large Dispositions.
RESTRICTED CASH See Note 21 — Restricted Cash for further information regarding the funds deposited with a third-party intermediary and cash held in escrow. 52 Table of Contents PERFORMANCE AND LIQUIDITY INDICATORS The discussion below is presented to enhance the reader’s understanding of our operating performance, liquidity, ability to generate cash and satisfy rating agency and creditor requirements.
RESTRICTED CASH See Note 21 — Restricted Cash for further information regarding the funds deposited with a third-party intermediary and cash held in escrow. 53 Table of Contents PERFORMANCE AND LIQUIDITY INDICATORS The discussion below is presented to enhance the reader’s understanding of our operating performance, liquidity, ability to generate cash and satisfy rating agency and creditor requirements.
See Note 20 — Income Taxes for additional information about our unrecognized tax benefits. 35 Table of Contents ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES We determine the costs of environmental remediation for areas we have been named potentially liable parties based on evaluations of current law and existing technologies.
See Note 20 — Income Taxes for additional information about our unrecognized tax benefits. 36 Table of Contents ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES We determine the costs of environmental remediation for areas we have been named potentially liable parties based on evaluations of current law and existing technologies.
See Note 13 — Guarantees for additional information on the letters of credit and surety bonds as of December 31, 2022. SUMMARY OF GUARANTOR FINANCIAL INFORMATION In May 2021, Rayonier, L.P. issued $450 million of 2.75% Senior Notes due 2031 (the “Senior Notes due 2031”).
See Note 13 — Guarantees for additional information on the letters of credit and surety bonds as of December 31, 2023. SUMMARY OF GUARANTOR FINANCIAL INFORMATION In May 2021, Rayonier, L.P. issued $450 million of 2.75% Senior Notes due 2031 (the “Senior Notes due 2031”).
The age at which timber is considered merchantable is reviewed periodically and updated for changing harvest practices, future harvest age profiles and biological growth factors. 34 Table of Contents Acquisitions of timberland can also affect the depletion rate.
The age at which timber is considered merchantable is reviewed periodically and updated for changing harvest practices, future harvest age profiles and biological growth factors. 35 Table of Contents Acquisitions of timberland can also affect the depletion rate.
See Note 18 — Employee Benefit Plans for additional information. Cash income tax payments in 2023 are expected to be between $5 million and $9 million, primarily due to the New Zealand subsidiary.
See Note 18 — Employee Benefit Plans for additional information. Cash income tax payments in 2024 are expected to be between $5.5 million and $9.5 million, primarily due to the New Zealand subsidiary.
Capital expenditures are expected to primarily consist of seedling planting, fertilization and other silvicultural activities, property taxes, lease payments, allocated overhead and other capitalized costs. Aside from capital expenditures, we may also acquire timberland as we actively evaluate acquisition opportunities. Real estate development investments in 2023 are expected to be between $25 million and $28 million, net of anticipated reimbursements.
Capital expenditures are expected to primarily consist of seedling planting, fertilization and other silvicultural activities, property taxes, lease payments, allocated overhead and other capitalized costs. Aside from capital expenditures, we may also acquire timberland as we actively evaluate acquisition opportunities. Real estate development investments in 2024 are expected to be between $28 million and $32 million, net of anticipated reimbursements.
See Note 1 — Summa ry of Significant Accounting Policies for additional information. DEFERRED TAX ITEMS The Timber and Real Estate operations conducted within our REIT are generally not subject to U.S. income taxation.
See Note 1 — Summary of Significant Accounting Policies for additional information. DEFERRED TAX ITEMS The Timber and Real Estate operations conducted within our REIT are generally not subject to U.S. income taxation.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, operating (income) loss attributable to noncontrolling interests in Timber Funds, timber write-offs resulting from casualty events, gain associated with the multi-family apartment complex sale attributable to noncontrolling interests, costs related to the merger with Pope Resources, the gain on investment in Timber Funds, Fund II Timberland Dispositions and Large Dispositions.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating income and expense, operating (income) loss attributable to noncontrolling interests in Timber Funds, timber write-offs resulting from casualty events, gain associated with the multi-family apartment complex sale attributable to noncontrolling interests, the gain on investment in Timber Funds, Fund II Timberland Dispositions and Large Dispositions.
Our 2023 outlook is subject to a number of variables and uncertainties, including those discussed at Item 1A — Risk Factors . 47 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Our principal source of cash is cash flow from operations, primarily the harvesting of timber and sales of real estate.
Our 2024 outlook is subject to a number of variables and uncertainties, including those discussed at Item 1A — Risk Factors . 48 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Our principal source of cash is cash flow from operations, primarily the harvesting of timber and sales of real estate.
Real Estate Development Investments are amortized as the underlying properties are sold and included in Non-Cash Cost of Land and Improved Development. 43 Table of Contents RESULTS OF OPERATIONS, 2022 VERSUS 2021 (millions of dollars) The following tables summarize sales, operating income and Adjusted EBITDA variances for 2022 versus 2021: Sales Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Elim.
Real Estate Development Investments are amortized as the underlying properties are sold and included in Non-Cash Cost of Land and Improved Development. 44 Table of Contents RESULTS OF OPERATIONS, 2023 VERSUS 2022 (millions of dollars) The following tables summarize sales, operating income and Adjusted EBITDA variances for 2023 versus 2022: Sales Southern Timber Pacific Northwest Timber New Zealand Timber Real Estate Trading Elim.
Factors that can impact timber volume include weather changes, losses due to natural causes, differences in actual versus estimated growth rates and changes in the age when timber is considered merchantable. A 3% company-wide change in estimated standing merchantable inventory would have caused an estimated change of approximately $3.9 million to 2022 depletion expense.
Factors that can impact timber volume include weather changes, losses due to natural causes, differences in actual versus estimated growth rates and changes in the age when timber is considered merchantable. A 3% company-wide change in estimated standing merchantable inventory would have caused an estimated change of approximately $5.6 million to 2023 depletion expense.
Future share repurchases, if any, will depend on the Company’s liquidity and cash flow, as well as general market conditions and other considerations including capital allocation priorities. 50 Table of Contents We made no discretionary pension contributions in 2022.
Future share repurchases, if any, will depend on the Company’s liquidity and cash flow, as well as general market conditions and other considerations including capital allocation priorities. 51 Table of Contents We made no discretionary pension contributions in 2023.
Total Volume) 100 % 100 % 100 % % Sawtimber Volume (vs. Total Volume) 78 % 76 % 76 % % Export Volume (vs.
Total Volume) 100 % 100 % 100 % % Sawtimber Volume (vs. Total Volume) 82 % 78 % 76 % % Export Volume (vs.
(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators .
(e) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators .
The changes in our discount rate and expected return on plan assets have an inverse relationship with our projected benefit obligation and pension expense, respectively. A hypothetical 25 basis point increase/decrease in our pension plan’s discount rate would result in a decrease/increase in the projected benefit obligation of approximately $1.9 million and $2.0 million, respectively.
The changes in our discount rate and expected return on plan assets have an inverse relationship with our projected benefit obligation and pension expense, respectively. A hypothetical 25 basis point increase/decrease in our pension plan’s discount rate would result in a decrease/increase in the projected benefit obligation of approximately $1.5 million and $1.6 million, respectively.
We expect to make estimated cash contributions in 2023 of approximately $7.6 million in order to fund the Defined Benefit Plan on a plan termination basis. Additionally, we anticipate settling the Excess Benefit Plan with lump sum payments upon termination of the Defined Benefit Plan with cash contributions of approximately $1.3 million.
We expect to make estimated cash contributions in 2024 of approximately $7.2 million in order to fund the Defined Benefit Plan on a plan termination basis. Additionally, we anticipate settling the Excess Benefit Plan with lump sum payments upon termination of the Defined Benefit Plan with cash contributions of approximately $1.2 million.
“OP” units) plus net debt based on Rayonier’s share price of $32.96, $40.36, and $29.38 as of December 31, 2022, 2021 and 2020, respectively. 48 Table of Contents AT-THE-MARKET EQUITY OFFERING PROGRAM (“ATM Program”) On November 4, 2022 we entered into a new distribution agreement with a group of sales agents through which we may sell common shares, from time to time, having an aggregate sales price of up to $300 million (the “2022 ATM Program”).
“OP” units) plus net debt based on Rayonier’s share price of $33.41, $32.96, and $40.36 as of December 31, 2023, 2022 and 2021, respectively. 49 Table of Contents AT-THE-MARKET (“ATM”) EQUITY OFFERING PROGRAM On November 4, 2022 we entered into a new distribution agreement with a group of sales agents through which we may sell common shares, from time to time, having an aggregate sales price of up to $300 million (the “2022 ATM Program”).
Sales and operating income in the current year included $30.5 million and $16.6 million, respectively, from Large Dispositions. Current year operating income also included an $11.5 million gain attributable to noncontrolling interests from the sale of a multi-family apartment complex in Bainbridge Island, Washington. Prior year sales and operating income included $56.0 million and $44.8 million, respectively, from Large Dispositions.
Prior year sales and operating income included $30.5 million and $16.6 million, respectively, from Large Dispositions. Prior year period operating income also included an $11.5 million gain attributable to noncontrolling interests from the sale of a multi-family apartment complex in Bainbridge Island, Washington.
We believe we have sufficient sources of funding to meet our business requirements for the next 12 months and in the longer term. EXPECTED 2023 EXPENDITURES Capital expenditures in 2023 are forecasted to be between $85 million and $95 million, excluding any strategic timberland acquisitions we may make.
We believe we have sufficient sources of funding to meet our business requirements for the next 12 months and in the longer term. EXPECTED 2024 EXPENDITURES Capital expenditures in 2024 are forecasted to be between $83 million and $88 million, excluding any strategic timberland acquisitions we may make.
During 2022, we acquired 141,000 acres of timberlands in Alabama, Florida, Georgia, Louisiana, Texas, Washington and New Zealand. These acquisitions did not have a material impact on 2022 depletion rates. REVENUE RECOGNITION See Note 1 - Summary of Significant Accounting Policies .
During 2023, we acquired 5,000 acres of timberlands in Florida, Georgia, Texas, Washington and New Zealand. These acquisitions did not have a material impact on 2023 depletion rates. REVENUE RECOGNITION See Note 1 — Summary of Significant Accounting Policies .
Adjusted EBITDA and CAD as defined may not be comparable to similarly titled measures reported by other companies. These measures should not be considered in isolation from, and are not intended to represent an alternative to, our results reported in accordance with GAAP.
Management uses Adjusted EBITDA as a performance measure and CAD as a liquidity measure. Adjusted EBITDA and CAD as defined may not be comparable to similarly titled measures reported by other companies. These measures should not be considered in isolation from, and are not intended to represent an alternative to, our results reported in accordance with GAAP.
Our Trading segment, primarily consisting of activity by the New Zealand subsidiary, markets and sells timber owned or acquired from third parties in New Zealand and Australia. We also engage in log trading activities from the U.S. South and U.S. Pacific Northwest. CURRENT YEAR DEVELOPMENTS During 2022, we acquired approximately 141,000 acres of timberlands for $458.5 million.
Our Trading segment, primarily consisting of activity by the New Zealand subsidiary, markets and sells timber owned or acquired from third parties in New Zealand and Australia. We also engage in log trading activities from the U.S. South and U.S. Pacific Northwest. CURRENT YEAR DEVELOPMENTS During 2023, we acquired approximately 5,000 acres of timberland for $14.1 million.
As of December 31, 2022, our credit ratings from S&P and Moody’s were “BBB-” and “Baa3,” respectively, with both agencies listing our outlook as “Stable.” SUMMARY OF LIQUIDITY AND FINANCING COMMITMENTS As of December 31, (in millions of dollars) 2022 2021 2020 Cash and cash equivalents (excluding Timber Funds) $114.3 $358.7 $80.5 Total debt (excluding Timber Funds) (a) 1,523.1 1,376.1 1,294.9 Noncontrolling interests in the operating partnership 105.8 133.8 130.1 Shareholders’ equity 1,880.7 1,815.6 1,862.6 Net Income Attributable to Rayonier Inc. 107.1 152.6 37.1 Adjusted EBITDA (b) 314.2 329.8 267.4 Total capitalization (total debt plus permanent and temporary equity) 3,509.6 3,325.5 3,287.6 Debt to capital ratio 43 % 41 % 39 % Debt to Adjusted EBITDA (b) 4.8 4.2 4.8 Net debt to Adjusted EBITDA (b)(c) 4.5 3.1 4.5 Net debt to enterprise value (c)(d) 22 % 14 % 23 % (a) Total debt as of December 31, 2022, 2021 and 2020 reflects the principal on long-term debt, net of fair market value adjustments and gross of deferred financing costs and unamortized discounts of $8.4 million, $8.3 million and $2.5 million, respectively.
As of December 31, 2023, our credit ratings from S&P and Moody’s were “BBB-” and “Baa3,” respectively, with both agencies listing our outlook as “Stable.” SUMMARY OF LIQUIDITY AND FINANCING COMMITMENTS As of December 31, (in millions of dollars) 2023 2022 2021 Cash and cash equivalents (excluding Timber Funds) $207.7 $114.3 $358.7 Total debt (excluding Timber Funds) (a) 1,372.7 1,523.1 1,376.1 Noncontrolling interests in the operating partnership 81.7 105.8 133.8 Shareholders’ equity 1,877.6 1,880.7 1,815.6 Net Income Attributable to Rayonier Inc. 173.5 107.1 152.6 Adjusted EBITDA (b) 296.5 314.2 329.8 Total capitalization (total debt plus permanent and temporary equity) 3,332.0 3,509.6 3,325.5 Debt to capital ratio 41 % 43 % 41 % Debt to Adjusted EBITDA (b) 4.6 4.8 4.2 Net debt to Adjusted EBITDA (b)(c) 3.9 4.5 3.1 Net debt to enterprise value (c)(d) 19 % 22 % 14 % (a) Total debt as of December 31, 2023, 2022 and 2021 reflects the principal on long-term debt, net of fair market value adjustments and gross of deferred financing costs and unamortized discounts of $6.9 million, $8.4 million and $8.3 million, respectively.
The following table contains the summarized balance sheet information for the consolidated obligor group of debt issued by Rayonier, L.P. for the two years ended December 31: (in millions) December 31, 2022 December 31, 2021 Current assets $112.2 $335.8 Non-current assets 122.8 54.6 Current liabilities 19.8 146.0 Non-current liabilities 2,001.9 1,821.7 Due to non-guarantors 520.4 570.4 The following table contains the summarized results of operations information for the consolidated obligor group of debt issued by Rayonier, L.P. for the two years ended December 31: (in millions) December 31, 2022 December 31, 2021 Cost and expenses ($28.9) ($27.5) Operating loss (28.9) (27.3) Net loss (54.3) (69.7) Revenue from non-guarantors 977.9 1,109.4 51 Table of Contents LIQUIDITY FACILITIES See Note 7 — Debt for information on liquidity facilities and other outstanding debt, as well as for information on covenants that must be met in connection with our Senior Notes due 2031, Term Credit Agreement, Incremental Term Loan Agreement, 2021 Incremental Term Loan Agreement, 2022 Incremental Term Loan Agreement and Revolving Credit Facility.
The following table contains the summarized balance sheet information for the consolidated obligor group of debt issued by Rayonier, L.P. for the two years ended December 31: (in millions) December 31, 2023 December 31, 2022 Current assets $197.5 $112.2 Non-current assets 98.8 122.8 Current liabilities 60.0 19.8 Non-current liabilities 2,181.6 2,001.9 Due to non-guarantors 861.5 520.4 The following table contains the summarized results of operations information for the consolidated obligor group of debt issued by Rayonier, L.P. for the two years ended December 31: (in millions) December 31, 2023 December 31, 2022 Cost and expenses ($32.3) ($28.9) Operating loss (32.3) (28.9) Net loss (70.5) (54.3) Revenue from non-guarantors 1,108.9 977.9 52 Table of Contents LIQUIDITY FACILITIES See Note 7 — Debt for information on liquidity facilities and other outstanding debt, as well as for information on covenants that must be met in connection with our Senior Notes due 2031, Term Credit Agreement, Incremental Term Loan Agreement, 2021 Incremental Term Loan Agreement, 2022 Incremental Term Loan Agreement and Revolving Credit Facility.
As of December 31, 2022, $270.7 million remains available for issuance under the 2022 ATM Program.
As of December 31, 2023, $269.7 million remains available for issuance under the 2022 ATM Program.
RESULTS OF OPERATIONS, 2021 VERSUS 2020 Refer to Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section contained in our Annual Report on Form 10-K for the year ended December 31, 2021 for the results of operations discussion for the fiscal year ended December 31, 2021 compared to the fiscal year ended December 31, 2020. 46 Table of Contents OUTLOOK FOR 2023 In 2023, we expect to achieve full-year harvest volumes in our Southern Timber segment of 6.7 to 7.0 m illion tons.
RESULTS OF OPERATIONS, 2022 VERSUS 2021 Refer to Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section contained in our Annual Report on Form 10-K for the year ended December 31, 2022 for the results of operations discussion for the fiscal year ended December 31, 2022 compared to the fiscal year ended December 31, 2021. 47 Table of Contents OUTLOOK FOR 2024 In 2024, we expect to achieve full-year harvest volumes in our Southern Timber segment of 7.1 to 7.3 m illion tons.
Other costs include amortization of capitalized costs related to road and bridge construction and software, depreciation of fixed assets and equipment, road maintenance, severance and excise taxes, fire prevention and real estate commissions and closing costs. In Real Estate, overall demand and pricing for HBU properties remained strong in 2022.
Other costs include amortization of capitalized costs related to road and bridge construction and software, depreciation of fixed assets and equipment, road maintenance, severance and excise taxes, fire prevention and real estate commissions and closing costs. In Real Estate, overall demand for rural HBU properties and our improved development projects remained strong in 2023.
For more information, see Governmental Regulations and Environmental Matters in Item 1 - Business , Note 1 — Summary of Significant Accounting Policies and Note 12 — Environmental Remediation Liabilities . 36 Table of Contents RESULTS OF OPERATIONS Summary of our results of operations for the three years ended December 31: Financial Information (in millions of dollars) 2022 2021 2020 Sales Southern Timber $264.2 $204.4 $191.8 Pacific Northwest Timber 162.2 143.0 120.8 New Zealand Timber 274.1 281.2 202.3 Timber Funds (a) — 199.4 29.6 Real Estate Improved Development 35.4 51.7 14.5 Unimproved Development — 37.5 8.4 Rural 59.5 43.1 67.2 Timberland & Non-Strategic. 11.4 — 19.3 Conservation Easement — 3.9 3.1 Deferred Revenue/Other (b) 1.2 (2.4) 0.9 Large Dispositions 30.5 56.0 116.0 Total Real Estate 138.0 189.9 229.3 Trading 71.0 95.4 89.0 Intersegment Eliminations (0.4) (3.7) (3.6) Total Sales $909.1 $1,109.6 $859.2 Operating Income (Loss) Southern Timber $96.6 $66.1 $41.3 Pacific Northwest Timber 15.2 6.8 (10.0) New Zealand Timber 30.6 51.5 30.0 Timber Funds (a) — 63.3 (13.2) Real Estate (b)(c) 58.5 112.5 72.0 Trading 0.4 0.1 (0.5) Corporate and other (35.5) (30.6) (45.2) Operating Income 165.8 269.8 74.4 Interest expense (36.2) (44.9) (38.8) Interest and other miscellaneous income, net 2.6 0.2 1.2 Income tax expense (9.4) (14.6) (7.0) Net Income 122.8 210.5 29.8 Less: Net (income) loss attributable to noncontrolling interests in consolidated affiliates (d) (13.3) (53.4) 7.8 Net Income Attributable to Rayonier, L.P. $109.5 $157.1 $37.6 Less: Net income attributable to noncontrolling interests in the operating partnership (2.4) (4.5) (0.5) Net Income Attributable to Rayonier Inc. $107.1 $152.6 $37.1 Adjusted EBITDA (e) Southern Timber $156.9 $120.2 $109.1 Pacific Northwest Timber 63.9 57.3 37.1 New Zealand Timber 54.5 78.5 55.0 Timber Funds — 2.3 1.8 Real Estate 72.7 100.7 91.4 Trading 0.4 0.1 (0.5) Corporate and other (34.2) (29.4) (26.6) Total Adjusted EBITDA (e) $314.2 $329.8 $267.4 (a) The year ended December 31, 2021 includes sales and operating income of $156.8 million and $51.5 million, respectively, from Fund II Timberland Dispositions.
For more information, see Governmental Regulations and Environmental Matters in Item 1 — Business , Note 1 — Summary of Significant Accounting Policies and Note 12 — Environmental Remediation Liabilities . 37 Table of Contents RESULTS OF OPERATIONS Summary of our results of operations for the three years ended December 31: Financial Information (in millions of dollars) 2023 2022 2021 Sales Southern Timber $264.1 $264.2 $204.4 Pacific Northwest Timber 124.1 162.2 143.0 New Zealand Timber 235.5 274.1 281.2 Timber Funds (a) — — 199.4 Real Estate Improved Development 30.7 35.4 51.7 Unimproved Development 0.1 — 37.5 Rural 99.7 59.5 43.1 Timberland & Non-Strategic 3.3 11.4 — Conservation Easement — — 3.9 Deferred Revenue/Other (b) 13.9 1.2 (2.4) Large Dispositions 242.2 30.5 56.0 Total Real Estate 390.0 138.0 189.9 Trading 43.7 71.0 95.4 Intersegment Eliminations (0.5) (0.4) (3.7) Total Sales $1,056.9 $909.1 $1,109.6 Operating Income (Loss) Southern Timber $76.3 $96.6 $66.1 Pacific Northwest Timber (c) (9.0) 15.2 6.8 New Zealand Timber (d) 26.0 30.6 51.5 Timber Funds (a) — — 63.3 Real Estate (e) 156.6 58.5 112.5 Trading 0.5 0.4 0.1 Corporate and other (39.1) (35.5) (30.6) Operating Income 211.3 165.8 269.8 Interest expense (48.3) (36.2) (44.9) Interest and other miscellaneous income, net (f) 20.6 2.6 0.2 Income tax expense (5.1) (9.4) (14.6) Net Income 178.5 122.8 210.5 Less: Net income attributable to noncontrolling interests in consolidated affiliates (g) (2.1) (13.3) (53.4) Net Income Attributable to Rayonier, L.P. $176.4 $109.5 $157.1 Less: Net income attributable to noncontrolling interests in the operating partnership (2.9) (2.4) (4.5) Net Income Attributable to Rayonier Inc. $173.5 $107.1 $152.6 Adjusted EBITDA (h) Southern Timber $156.2 $156.9 $120.2 Pacific Northwest Timber 27.9 63.9 57.3 New Zealand Timber 50.0 54.5 78.5 Timber Funds — — 2.3 Real Estate 99.3 72.7 100.7 Trading 0.5 0.4 0.1 Corporate and other (37.4) (34.2) (29.4) Total Adjusted EBITDA (h) $296.5 $314.2 $329.8 (a) The year ended December 31, 2021 includes sales and operating income of $156.8 million and $51.5 million, respectively, from Fund II Timberland Dispositions.
Management considers these measures to be important to estimate the enterprise and shareholder values and of our core segments, and for allocating capital resources. In addition, analysts, investors and creditors use these measures when analyzing our operating performance, financial condition and cash generating ability. Management uses Adjusted EBITDA as a performance measure and CAD as a liquidity measure.
Management considers these measures to be important to estimate the enterprise and shareholder values of the Company as a whole and of its core segments, and for allocating capital resources. In addition, analysts, investors and creditors use these measures when analyzing our operating performance, financial condition and cash generating ability.
(g) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators . 41 Table of Contents Trading Overview 2022 2021 2020 Sales Volume (in thousands of tons) U.S. 99 1 1 NZ 460 705 959 Total Volume 559 706 960 Summary Financial Data (in millions of dollars) Trading Sales $69.3 $93.6 $87.6 Non-Timber Sales 1.7 1.7 1.4 Total Sales $71.0 $95.4 $89.0 Operating Income (Loss) $0.4 $0.1 ($0.5) Adjusted EBITDA (a) $0.4 $0.1 ($0.5) (a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators . 42 Table of Contents Capital Expenditures By Segment 2022 2021 2020 Timber Capital Expenditures (in millions of dollars) Southern Timber Reforestation, silvicultural and other capital expenditures $24.1 $21.5 $20.7 Property taxes 7.1 6.8 6.8 Lease and timber deed payments 3.1 3.1 3.5 Allocated overhead 4.9 4.4 4.4 Subtotal Southern Timber $39.3 $35.8 $35.5 Pacific Northwest Timber Reforestation, silvicultural and other capital expenditures 10.5 10.8 6.5 Property taxes 1.1 1.1 0.8 Allocated overhead 5.2 4.7 4.1 Subtotal Pacific Northwest Timber $16.8 $16.6 $11.4 New Zealand Timber Reforestation, silvicultural and other capital expenditures 10.9 11.2 8.9 Property taxes 0.8 0.8 0.7 Lease and timber deed payments 4.4 5.2 4.3 Allocated overhead 2.4 3.0 2.7 Subtotal New Zealand Timber $18.5 $20.1 $16.6 Total Timber Segments Capital Expenditures $74.5 $72.5 $63.5 Timber Funds (“Look-through”) (a) — 0.5 0.3 Real Estate 0.3 0.2 0.4 Total Capital Expenditures $74.8 $73.2 $64.2 Timberland Acquisitions Southern Timber $457.8 $168.2 $24.2 New Zealand Timber 0.7 10.9 0.5 Total Timberland Acquisitions $458.5 $179.1 $24.7 Real Estate Development Investments (b) $13.7 $12.5 $6.5 (a) The years ended December 31, 2021 and December 31, 2020 exclude $2.8 million and $2.3 million, respectively, of capital expenditures attributable to noncontrolling interests in Timber Funds.
(g) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators . 42 Table of Contents Trading Overview 2023 2022 2021 Sales Volume (in thousands of tons) U.S. 71 99 1 NZ 307 460 705 Total Volume 378 559 706 Summary Financial Data (in millions of dollars) Trading Sales $41.9 $69.3 $93.6 Non-Timber Sales 1.8 1.7 1.7 Total Sales $43.7 $71.0 $95.4 Operating Income $0.5 $0.4 $0.1 Adjusted EBITDA (a) $0.5 $0.4 $0.1 (a) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators . 43 Table of Contents Capital Expenditures By Segment 2023 2022 2021 Timber Capital Expenditures (in millions of dollars) Southern Timber Reforestation, silviculture and other capital expenditures $30.6 $24.1 $21.5 Property taxes 7.3 7.1 6.8 Lease payments 2.8 3.1 3.1 Allocated overhead 5.9 4.9 4.4 Subtotal Southern Timber $46.5 $39.3 $35.8 Pacific Northwest Timber Reforestation, silviculture and other capital expenditures 10.9 10.5 10.8 Property taxes 0.9 1.1 1.1 Allocated overhead 5.6 5.2 4.7 Subtotal Pacific Northwest Timber $17.4 $16.8 $16.6 New Zealand Timber Reforestation, silviculture and other capital expenditures 8.6 10.9 11.2 Property taxes 0.8 0.8 0.8 Lease payments 4.5 4.4 5.2 Allocated overhead 2.8 2.4 3.0 Subtotal New Zealand Timber $16.7 $18.5 $20.1 Total Timber Segments Capital Expenditures $80.5 $74.5 $72.5 Timber Funds (“Look-through”) (a) — — 0.5 Real Estate 0.3 0.3 0.2 Corporate 0.6 — — Total Capital Expenditures $81.4 $74.8 $73.2 Timberland Acquisitions Southern Timber $10.5 $457.8 $168.2 Pacific Northwest Timber 3.6 — — New Zealand Timber — 0.7 10.9 Total Timberland Acquisitions $14.1 $458.5 $179.1 Real Estate Development Investments (b) $23.1 $13.7 $12.5 (a) The year ended December 31, 2021 excludes $2.8 million of capital expenditures attributable to noncontrolling interests in Timber Funds.
(b) For a reconciliation of Adjusted EBITDA to net income see Management’s Discussion and Analysis of Financial Condition and Results of Operations—Performance and Liquidity Indicators . (c) Net debt is calculated as total debt less cash and cash equivalents. (d) Enterprise value based on market capitalization (including Rayonier, L.P.
(b) For a reconciliation of Adjusted EBITDA to net income see Item 7 — Performance and Liquidity Indicators . (c) Net debt is calculated as total debt less cash and cash equivalents. (d) Enterprise value based on market capitalization (including Rayonier, L.P.
For additional information on acquisitions, see Note 4 - Timberland Acquisitions . INDUSTRY AND MARKET CONDITIONS The demand for timber is directly related to the underlying demand for pulp, paper, packaging, lumber and other wood products. The significant majority of timber sold in our Southern Timber segment is consumed domestically.
INDUSTRY AND MARKET CONDITIONS The demand for timber is directly related to the underlying demand for pulp, paper, packaging, lumber and other wood products. The significant majority of timber sold in our Southern Timber segment is consumed domestically.
(e) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators . 37 Table of Contents Southern Timber Overview 2022 2021 2020 Sales Volume (in thousands of tons) Pine Pulpwood 3,911 3,516 3,804 Pine Sawtimber 2,041 2,001 2,243 Total Pine Volume 5,952 5,517 6,047 Hardwood 331 177 152 Total Volume 6,283 5,694 6,199 % Delivered Volume (vs.
(h) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators . 38 Table of Contents Southern Timber Overview 2023 2022 2021 Sales Volume (in thousands of tons) Pine Pulpwood 3,821 3,911 3,516 Pine Sawtimber 3,295 2,041 2,001 Total Pine Volume 7,116 5,952 5,517 Hardwood 198 331 177 Total Volume 7,314 6,283 5,694 % Delivered Volume (vs.
Total Volume) 92 % 88 % 90 % % Sawtimber Volume (vs. Total Volume) 81 % 83 % 82 % % Export Volume (vs.
Total Volume) 97 % 92 % 88 % % Sawtimber Volume (vs. Total Volume) 83 % 81 % 83 % % Export Volume (vs.
INCOME TAX EXPENSE Full-year income tax expense of $9.4 million decreased $5.3 million versus the prior year period as a result of lower taxable income. The New Zealand subsidiary is the primary driver of income tax expense.
INCOME TAX EXPENSE Full-year income tax expense of $5.1 million decreased $4.3 million versus the prior year period. The New Zealand subsidiary is the primary driver of income tax expense.
As a REIT, our main use of cash is dividends on Rayonier Inc. common shares and distributions on Rayonier, L.P. units. We also use cash to maintain the productivity of our timberlands through replanting and silviculture. Our operations have generally produced consistent cash flow and required limited capital resources.
As a REIT, our main use of cash is dividends on Rayonier Inc. common shares and distributions on Rayonier, L.P. units. We also use cash to maintain the productivity of our timberlands through replanting and silviculture.
CASH USED FOR FINANCING ACTIVITIES Cash used for financing activities decreased $11.7 million from the prior year due to an increase in net borrowings ($98.6 million), lower distributions to noncontrolling interests in consolidated affiliates ($89.5 million), make-whole fees on debt prepayments in the prior year ($6.2 million), lower debt issuance costs ($4.1 million) and lower distributions to noncontrolling interests in the operating partnership ($0.6 million), partially offset by lower proceeds from the issuance of common shares under the ATM Program ($169.3 million), higher dividends paid on common stock ($12.2 million), lower proceeds from the issuance of common shares under the incentive stock plan ($3.3 million) and increases in share repurchases for tax withholding on vested incentive stock awards ($2.6 million). 49 Table of Contents FUTURE USES OF CASH We expect future uses of cash to include working capital requirements, principal and interest payments on long-term debt, lease payments, capital expenditures, real estate development investments, timberland acquisitions, dividends on Rayonier Inc. common shares and distributions on Rayonier, L.P. units, distributions to noncontrolling interests, and repurchases of the Company’s common shares to satisfy other commitments.
CASH USED FOR FINANCING ACTIVITIES Cash used for financing activities increased $324.3 million from the prior year due to a decrease in net borrowings ($275.0 million), lower proceeds from the issuance of common shares under the ATM Program ($61.6 million), higher dividends paid on common shares ($4.3 million), and lower proceeds from the issuance of common shares under the incentive stock plan ($2.6 million), partially offset by lower distributions to noncontrolling interests in consolidated affiliates ($17.7 million), lower debt issuance costs ($0.7 million) and lower distributions to noncontrolling interests in the operating partnership ($0.7 million). 50 Table of Contents FUTURE USES OF CASH We expect future uses of cash to include working capital requirements, principal and interest payments on long-term debt, lease payments, capital expenditures, real estate development investments, timberland acquisitions, dividends on Rayonier Inc. common shares and distributions on Rayonier, L.P. units, distributions to noncontrolling interests, and repurchases of the Company’s common shares to satisfy other commitments.
Sales from our timber segments include all activities related to the harvesting of timber and other value-added activities such as the licensing of properties for hunting, the leasing of properties for mineral extraction and cell towers, as well as nature based solutions such as carbon credit sales.
Sales from our timber segments include all activities related to the harvesting of timber and other value-added activities such as the licensing of properties for hunting, the leasing of properties for mineral extraction and cell towers, and revenue from land-based solutions such as carbon capture and storage, solar and wind energy, and carbon credits.
Total Volume) (a) 2 % 5 % 3 % Net Stumpage Prices (dollars per ton) (b) Pine Pulpwood $22.45 $19.09 $15.83 Pine Sawtimber 34.36 28.27 25.72 Weighted Average Pine $26.53 $22.42 $19.50 Hardwood 23.48 17.96 11.52 Weighted Average Total $26.37 $22.28 $19.30 Summary Financial Data (in millions of dollars) Timber Sales $236.6 $179.8 $170.2 Less: Cut and Haul (64.0) (43.6) (45.4) Less: Port and Freight (6.8) (9.4) (5.2) Net Stumpage Sales $165.8 $126.9 $119.6 Non-Timber Sales 27.6 24.6 21.6 Total Sales $264.2 $204.4 $191.8 Operating Income $96.6 $66.1 $41.3 (+) Timber write-offs resulting from casualty events (c) — — 6.0 (+) Depreciation, depletion and amortization 60.3 54.1 61.8 Adjusted EBITDA (d) $156.9 $120.2 $109.1 Other Data Year-End Acres (in thousands) 1,919 1,798 1,733 (a) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program.
Total Volume) (a) 1 % 2 % 5 % Net Stumpage Prices (dollars per ton) Pine Pulpwood $16.78 $22.45 $19.09 Pine Sawtimber 29.64 34.36 28.27 Weighted Average Pine $22.73 $26.53 $22.42 Hardwood 13.89 23.48 17.96 Weighted Average Total $22.49 $26.37 $22.28 Summary Financial Data (in millions of dollars) Timber Sales $226.6 $236.6 $179.8 Less: Cut and Haul (58.0) (64.0) (43.6) Less: Port and Freight (4.5) (6.8) (9.4) Net Stumpage Sales $164.1 $165.8 $126.9 Non-Timber Sales 37.5 27.6 24.6 Total Sales $264.1 $264.2 $204.4 Operating Income $76.3 $96.6 $66.1 (+) Depreciation, depletion and amortization 80.0 60.3 54.1 Adjusted EBITDA (b) $156.2 $156.9 $120.2 Other Data Year-End Acres (in thousands) 1,852 1,919 1,798 (a) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program.
Below is a reconciliation of Net Income to Adjusted EBITDA for the three years ended December 31 (in millions of dollars): 2022 2021 2020 Net Income to Adjusted EBITDA Reconciliation Net Income $122.8 $210.5 $29.8 Operating (income) loss attributable to NCI in Timber Funds — (45.6) 11.6 Interest, net attributable to NCI in Timber Funds — 0.3 0.5 Income tax expense attributable to NCI in Timber Funds — 0.1 0.2 Net income (Excluding NCI in Timber Funds) $122.8 $165.3 $42.1 Interest, net and miscellaneous income attributable to Rayonier 33.2 44.3 38.0 Income tax expense attributable to Rayonier 9.4 14.6 6.8 Depreciation, depletion and amortization attributable to Rayonier 147.3 143.2 154.7 Non-cash cost of land and improved development 28.4 25.0 30.4 Non-operating expense (income) 0.4 — (0.9) Timber write-offs resulting from a casualty event attributable to Rayonier (a) 0.7 — 7.9 Gain associated with the multi-family apartment complex sale attributable to NCI (b) (11.5) — — Costs related to the merger with Pope Resources (c) — — 17.2 Gain on investment in Timber Funds (d) — (7.5) — Fund II Timberland Dispositions attributable to Rayonier (e) — (10.3) — Large Dispositions (f) (16.6) (44.8) (28.7) Adjusted EBITDA $314.2 $329.8 $267.4 (a) Timber write-offs resulting from a casualty event includes the write-off of merchantable and pre-merchantable timber volume destroyed by casualty events which cannot be salvaged.
Below is a reconciliation of Net Income to Adjusted EBITDA for the three years ended December 31 (in millions of dollars): 2023 2022 2021 Net Income to Adjusted EBITDA Reconciliation Net Income $178.5 $122.8 $210.5 Operating (income) loss attributable to NCI in Timber Funds — — (45.6) Interest, net attributable to NCI in Timber Funds — — 0.3 Income tax expense attributable to NCI in Timber Funds — — 0.1 Net income (Excluding NCI in Timber Funds) $178.5 $122.8 $165.3 Interest, net and miscellaneous income attributable to Rayonier 45.9 33.2 44.3 Income tax expense attributable to Rayonier 5.1 9.4 14.6 Depreciation, depletion and amortization attributable to Rayonier 158.2 147.3 143.2 Non-cash cost of land and improved development 29.8 28.4 25.0 Non-operating (income) expense (a) (18.3) 0.4 — Timber write-offs resulting from casualty events attributable to Rayonier (b) 2.3 0.7 — Gain associated with the multi-family apartment complex sale attributable to NCI (c) — (11.5) — Gain on investment in Timber Funds (d) — — (7.5) Fund II Timberland Dispositions attributable to Rayonier (e) — — (10.3) Large Dispositions (f) (105.1) (16.6) (44.8) Adjusted EBITDA $296.5 $314.2 $329.8 (a) The year ended December 31, 2023 includes $20.7 million of net recoveries associated with legal settlements, partially offset by a $2.0 million pension settlement charge.
(c) Represents the period average rates for each year. 40 Table of Contents Real Estate Overview 2022 2021 2020 Sales (in millions of dollars) Improved Development (a) $35.4 $51.7 $14.5 Unimproved Development — 37.5 8.4 Rural 59.5 43.1 67.2 Timberland & Non-Strategic 11.4 — 19.3 Conservation Easement — 3.9 3.1 Deferred Revenue/Other (b) 1.2 (2.4) 0.9 Large Dispositions (c) 30.5 56.0 116.0 Total Sales $138.0 $189.9 $229.3 Acres Sold Improved Development (a) 225 791 330 Unimproved Development — 359 570 Rural 13,156 14,565 22,437 Timberland & Non-Strategic 3,966 34 20,701 Large Dispositions (c) 10,977 16,622 66,946 Total Acres Sold 28,323 32,371 110,984 Price per Acre (dollars per acre) Improved Development (a) $157,424 $65,375 $43,957 Unimproved Development — 104,579 14,780 Rural 4,522 2,958 2,993 Timberland & Non-Strategic 2,874 1,297 930 Large Dispositions (c) 2,776 3,372 1,733 Weighted Average (Total) (d) $6,128 $8,403 $2,483 Weighted Average (Adjusted) (e) $4,140 $5,391 $2,170 Total Sales (Excluding Large Dispositions) $107.5 $133.9 $113.3 Operating Income $58.5 $112.5 $72.0 (+) Depreciation, depletion and amortization 13.9 7.9 17.7 (+) Non-cash cost of land and improved development 28.4 25.0 30.4 (–) Gain associated with the multi-family apartment complex sale attributable to NCI (f) (11.5) — — (–) Large Dispositions (c) (16.6) (44.8) (28.7) Adjusted EBITDA (g) $72.7 $100.7 $91.4 (a) Reflects land with capital invested in infrastructure improvements.
(e) Represents the period-average rate. 41 Table of Contents Real Estate Overview 2023 2022 2021 Sales (in millions of dollars) Improved Development (a) $30.7 $35.4 $51.7 Unimproved Development 0.1 — 37.5 Rural 99.7 59.5 43.1 Timberland & Non-Strategic 3.3 11.4 — Conservation Easement — — 3.9 Deferred Revenue/Other (b) 13.9 1.2 (2.4) Large Dispositions (c) 242.2 30.5 56.0 Total Sales $390.0 $138.0 $189.9 Acres Sold Improved Development (a) 376 225 791 Unimproved Development 10 — 359 Rural 28,955 13,156 14,565 Timberland & Non-Strategic 1,270 3,966 34 Large Dispositions (c) 55,008 10,977 16,622 Total Acres Sold 85,618 28,323 32,371 Price per Acre (dollars per acre) Improved Development (a) $81,756 $157,424 $65,375 Unimproved Development 11,250 — 104,579 Rural 3,442 4,522 2,958 Timberland & Non-Strategic 2,636 2,874 1,297 Large Dispositions (c) 4,403 2,776 3,372 Weighted Average (Total) (d) $4,372 $6,128 $8,403 Weighted Average (Adjusted) (e) $3,411 $4,140 $5,391 Total Sales (Excluding Large Dispositions) $147.8 $107.5 $133.9 Operating Income $156.6 $58.5 $112.5 (–) Gain associated with the multi-family apartment complex sale attributable to NCI (f) — (11.5) — (–) Large Dispositions (c) (105.1) (16.6) (44.8) (+) Depreciation, depletion and amortization 18.0 13.9 7.9 (+) Non-cash cost of land and improved development 29.8 28.4 25.0 Adjusted EBITDA (g) $99.3 $72.7 $100.7 (a) Reflects land with capital invested in infrastructure improvements.
Total Volume) 43 % 40 % 41 % % Pine Sawtimber Volume (vs. Total Pine Volume) 34 % 36 % 37 % % Export Volume (vs.
Total Volume) 35 % 43 % 40 % % Pine Sawtimber Volume (vs. Total Pine Volume) 46 % 34 % 36 % % Export Volume (vs.
The following table outlines the common stock issuance pursuant to our ATM Programs (dollars in millions): Year Ended December 31, 2022 2021 Shares of common stock issued under the ATM Programs 1,579,228 6,357,972 Average price of common stock issued under the ATM Programs $38.05 $37.05 Gross proceeds $60.4 $235.5 Commissions $0.6 $2.4 CASH FLOWS The following table summarizes our cash flows from operating, investing and financing activities for each of the three years ended December 31 (in millions of dollars): 2022 2021 2020 Total cash provided by (used for): Operating activities $269.2 $325.1 $204.2 Investing activities (516.4) (26.3) (213.6) Financing activities (4.6) (16.3) 27.0 Effect of exchange rate changes on cash (1.9) (0.9) (0.1) Change in cash, cash equivalents and restricted cash ($253.7) $281.7 $17.5 CASH PROVIDED BY OPERATING ACTIVITIES Cash provided by operating activities decreased $55.9 million versus the prior year primarily due to lower operating results and higher cash taxes paid.
The following table outlines the common shares issuance pursuant to our ATM Program (dollars in millions): Year Ended December 31, 2023 2022 Common shares issued under the ATM Program 400 1,579,228 Average price of common shares issued under the ATM Program $34.03 $38.05 Gross proceeds — $60.4 Commissions — $0.6 CASH FLOWS The following table summarizes our cash flows from operating, investing and financing activities for each of the three years ended December 31 (in millions of dollars): 2023 2022 2021 Total cash provided by (used for): Operating activities $298.4 $269.2 $325.1 Investing activities 124.1 (516.4) (26.3) Financing activities (328.9) (4.6) (16.3) Effect of exchange rate changes on cash (0.6) (1.9) (0.9) Change in cash, cash equivalents and restricted cash $93.0 ($253.7) $281.7 CASH PROVIDED BY OPERATING ACTIVITIES Cash provided by operating activities increased $29.2 million versus the prior year primarily due to changes in working capital.
Total Volume) (a) 59 % 58 % 54 % Delivered Log Pricing (in dollars per ton) Domestic Pulpwood $33.50 $41.97 $33.79 Domestic Sawtimber 71.87 83.19 70.37 Export Sawtimber 124.91 138.84 98.47 Weighted Average Log Price $96.77 $107.65 $78.17 Summary Financial Data (in millions of dollars) Timber Sales $253.1 $280.1 $194.5 Less: Cut and Haul (95.8) (93.4) (77.6) Less: Port and Freight Costs (92.5) (89.6) (42.9) Net Stumpage Sales $64.8 $97.1 $74.0 Non-Timber Sales / Carbon Credits 21.0 1.1 7.8 Total Sales $274.1 $281.2 $202.3 Operating Income $30.6 $51.5 $30.0 (+) Depreciation, depletion and amortization 23.9 27.0 25.0 Adjusted EBITDA (b) $54.5 $78.5 $55.0 Other Data New Zealand Dollar to U.S.
Total Volume) (a) 64 % 59 % 58 % Delivered Log Pricing (in dollars per ton) Domestic Pulpwood $34.58 $33.50 $41.97 Domestic Sawtimber 66.31 71.87 83.19 Export Sawtimber 102.39 124.91 138.84 Weighted Average Log Price $85.27 $96.77 $107.65 Summary Financial Data (in millions of dollars) Timber Sales $211.1 $253.1 $280.1 Less: Cut and Haul (b) (84.5) (94.3) (91.9) Less: Port and Freight (b) (64.8) (94.1) (91.1) Net Stumpage Sales $61.8 $64.8 $97.1 Non-Timber Sales / Carbon Credits 24.4 21.0 1.1 Total Sales $235.5 $274.1 $281.2 Operating Income $26.0 $30.6 $51.5 (+) Timber write-offs resulting from casualty events (c) 2.3 — — (+) Depreciation, depletion and amortization 21.7 23.9 27.0 Adjusted EBITDA (d) $50.0 $54.5 $78.5 Other Data New Zealand Dollar to U.S.
The following table provides supplemental cash flow data for the three years ended December 31 (in millions): 2022 2021 2020 Purchase of timberlands ($458.5) ($179.1) ($24.7) Real Estate development investments (13.7) (12.5) (6.5) Distributions to noncontrolling interests in consolidated affiliates (19.4) (109.0) (12.6) 55 Table of Contents
(b) Reflects net proceeds received from litigation regarding insurance claims. The following table provides supplemental cash flow data for the three years ended December 31 (in millions): 2023 2022 2021 Purchase of timberlands ($14.1) ($458.5) ($179.1) Real Estate development investments (23.1) (13.7) (12.5) Distributions to noncontrolling interests in consolidated affiliates (1.7) (19.4) (109.0) 56 Table of Contents
(d) Delivered Sawtimber excluding chip-n-saw. 39 Table of Contents New Zealand Timber Overview 2022 2021 2020 Sales Volume (in thousands of tons) Domestic Pulpwood (Delivered) 388 425 470 Domestic Sawtimber (Delivered) 686 671 665 Export Pulpwood (Delivered) 182 198 133 Export Sawtimber (Delivered) 1,360 1,308 1,221 Total Volume 2,616 2,602 2,488 % Delivered Volume (vs.
(f) Delivered Sawtimber excluding chip-n-saw. 40 Table of Contents New Zealand Timber Overview 2023 2022 2021 Sales Volume (in thousands of tons) Domestic Pulpwood (Delivered) 225 388 425 Domestic Sawtimber (Delivered) 677 686 671 Export Pulpwood (Delivered) 230 182 198 Export Sawtimber (Delivered) 1,344 1,360 1,308 Total Volume 2,476 2,616 2,602 % Delivered Volume (vs.
Below is a reconciliation of Cash Provided by Operating Activities to Adjusted CAD for the three years ended December 31 (in millions): 2022 2021 2020 Cash provided by operating activities $269.2 $325.1 $204.2 Capital expenditures from continuing operations (a) (74.8) (76.0) (66.5) Costs related to the merger with Pope Resources (b) — — 17.2 CAD attributable to NCI in Timber Funds — (12.9) (2.8) Working capital and other balance sheet changes (5.9) (28.4) 10.3 CAD $188.5 $207.8 $162.4 Mandatory debt repayments — (325.0) — Adjusted CAD $188.5 ($117.2) $162.4 Cash used for investing activities ($516.4) ($26.3) ($213.6) Cash (used for) provided by financing activities ($4.6) ($16.3) $27.0 (a) Capital expenditures exclude timberland acquisitions and real estate development investments.
Below is a reconciliation of Cash Provided by Operating Activities to Adjusted CAD for the three years ended December 31 (in millions): 2023 2022 2021 Cash provided by operating activities $298.4 $269.2 $325.1 Capital expenditures from continuing operations (a) (81.4) (74.8) (76.0) CAD attributable to NCI in Timber Funds — — (12.9) Net recovery on legal settlements (b) (20.7) — — Working capital and other balance sheet changes (32.4) (2.9) (28.2) CAD $163.9 $191.5 $208.0 Mandatory debt repayments — — (325.0) Adjusted CAD $163.9 $191.5 ($117.0) Cash provided by (used for) investing activities $124.1 ($516.4) ($26.3) Cash used for financing activities ($328.9) ($4.6) ($16.3) (a) Capital expenditures exclude timberland acquisitions and real estate development investments.
(d) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 - Performance and Liquidity Indicators . 38 Table of Contents Pacific Northwest Timber Overview 2022 2021 2020 Sales Volume (in thousands of tons) Pulpwood 300 287 297 Sawtimber 1,285 1,382 1,306 Total Volume 1,585 1,669 1,603 % Delivered Volume (vs.
(b) Adjusted EBITDA is a non-GAAP measure defined and reconciled in Item 7 — Performance and Liquidity Indicators . 39 Table of Contents Pacific Northwest Timber Overview 2023 2022 2021 Sales Volume (in thousands of tons) Pulpwood 216 300 287 Domestic Sawtimber (a) 999 1,188 1,382 Export Sawtimber 89 97 — Total Volume 1,305 1,585 1,669 % Delivered Volume (vs.
The cost basis of real estate sold includes the cost basis in land and costs directly associated with the development and construction of identified real estate projects, such as infrastructure, roadways, utilities, amenities and/or other improvements.
Depletion includes the amortization of capitalized site preparation, planting and fertilization, real estate taxes, timberland lease payments and certain payroll costs. The cost basis of real estate sold includes the cost basis in land and costs directly associated with the development and construction of identified real estate projects, such as infrastructure, roadways, utilities, amenities and/or other improvements.
(e) Commitments — derivatives represent payments expected to be made on derivative financial instruments (foreign exchange contracts). See Note 8 — Derivative Financial Instruments and Hedging Activities for additional information. (f) Commitments — environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages in Port Gamble, Washington.
See Note 8 — Derivative Financial Instruments and Hedging Activities for additional information. (e) Commitments — environmental remediation represents our estimate of potential liability associated with environmental contamination and Natural Resource Damages in Port Gamble, Washington. See Note 12 — Environmental and Natural Resource Damage Liabilities for additional information.
Total Volume) (a) 11 % 16 % 10 % Delivered Log Pricing (in dollars per ton) Pulpwood $50.83 $31.65 $35.51 Sawtimber 112.44 97.87 84.93 Weighted Average Log Price $100.50 $86.23 $75.44 Summary Financial Data (in millions of dollars) Timber Sales $156.6 $137.1 $116.6 Less: Cut and Haul (62.7) (55.3) (54.6) Less: Port and Freight (2.8) — — Net Stumpage Sales $91.1 $81.8 $62.0 Non-Timber Sales 5.6 5.9 4.2 Total Sales $162.2 $143.0 $120.8 Operating Income (Loss) $15.2 $6.8 ($10.0) (+) Timber write-off resulting from casualty events (b) 0.7 — — (+) Depreciation, depletion and amortization 48.0 50.5 47.1 Adjusted EBITDA (c) $63.9 $57.3 $37.1 Other Data Year-End Acres (in thousands) 474 490 507 Northwest Sawtimber (in dollars per MBF) (d) $849 $748 $666 (a) Estimated percentage of export volume, which includes volumes sold to third-party exporters in addition to direct exports through our log export program.
Total Volume) (b) 12 % 11 % 16 % Delivered Log Pricing (in dollars per ton) Pulpwood $38.78 $50.83 $31.65 Domestic Sawtimber 97.71 111.96 97.87 Export Sawtimber (c) 142.63 117.85 — Weighted Average Log Price $90.97 $100.50 $86.23 Summary Financial Data (in millions of dollars) Timber Sales $117.9 $156.6 $137.1 Less: Cut and Haul (56.6) (62.7) (55.3) Less: Port and Freight (5.2) (2.8) — Net Stumpage Sales $56.1 $91.1 $81.8 Non-Timber Sales 6.3 5.6 5.9 Total Sales $124.1 $162.2 $143.0 Operating Income (Loss) ($9.0) $15.2 $6.8 (+) Timber write-offs resulting from casualty events (d) — 0.7 — (+) Depreciation, depletion and amortization 36.9 48.0 50.5 Adjusted EBITDA (e) $27.9 $63.9 $57.3 Other Data Year-End Acres (in thousands) 418 474 490 Northwest Sawtimber (in dollars per MBF) (f) $711 $849 $748 (a) Includes volumes sold to third-party exporters.
Dollar Exchange Rate (c) 0.6350 0.7090 0.6522 Net Plantable Year-End Acres (in thousands) 297 296 296 Export Sawtimber (in dollars per JAS m 3 ) $145.23 $161.42 $114.50 Domestic Sawtimber (in $NZD per tonne) $124.50 $129.07 $118.69 (a) Estimated percentage of export volume which includes volumes sold to third-party exporters in addition to direct exports through our log export program.
Dollar Exchange Rate (e) 0.6117 0.6350 0.7090 Net Plantable Year-End Acres (in thousands) 297 297 296 Export Sawtimber (in dollars per JAS m 3 ) $119.04 $145.23 $161.42 Domestic Sawtimber (in $NZD per tonne) $119.25 $124.50 $129.07 (a) Percentage of export volume reflects direct exports through our log export program.
Our 2023 dividend payments on Rayonier Inc. common shares and distributions to Rayonier, L.P. unitholders are expected to be approximately $167.9 million and $3.7 million, respectively, assuming no change in the quarterly dividend rate of $0.285 per share or material changes in the number of common shares or partnership units outstanding.
Our 2024 dividend payments on Rayonier Inc. common shares and distributions to Rayonier, L.P. unitholders, excluding the additional dividend and distribution payable January 12, 2024 to shareholders of record on December 29, 2023, are expected to be approximately $170.4 million and $2.8 million, respectively, assuming no change in the quarterly dividend rate of $0.285 per share or partnership unit, or material changes in the number of common shares or partnership units outstanding.
See Note 12 - Environmental and Natural Resource Damage Liabilities for additional information. (g) Commitments — other includes other purchase obligations. We expect to fund future uses of cash with a combination of existing cash balances, cash generated by operating activities, the remaining issuances available under the Company’s ATM Program, Large Dispositions and the use of our revolving credit facilities.
We expect to fund future uses of cash with a combination of existing cash balances, cash generated by operating activities, the remaining issuances available under the Company’s ATM Program, Large Dispositions and the use of our revolving credit facilities.
See Note 7 - Debt for additional information. (b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of December 31, 2022. (c) Excludes anticipated renewal options. (d) Commitments — development projects primarily consists of payments expected to be made on our Wildlight and Heartwood projects.
See Note 7 — Debt for additional information. (b) Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of December 31, 2023 and excludes the impact of hedging. (c) Excludes anticipated renewal options. (d) Commitments — derivatives represent payments expected to be made on derivative financial instruments (foreign exchange contracts).
(b) Gain associated with the multi-family apartment complex sale attributable to noncontrolling interests represents the gain recognized in connection with the sale of property by the Bainbridge Landing joint venture attributable to noncontrolling interests.
(c) Gain associated with the multi-family apartment complex sale attributable to noncontrolling interests represents the gain recognized in connection with the sale of property by the Bainbridge Landing joint venture attributable to noncontrolling interests. (d) Includes $41.2 million of income from Fund II Timberland Dispositions.
Operating Income Southern Timber Pacific Northwest Timber New Zealand Timber Timber Funds Real Estate Trading Corporate and Other Total 2021 $66.1 $6.8 $51.5 $63.3 $112.5 $0.1 ($30.6) $269.8 Volume 7.5 (1.1) 0.4 — 9.7 — — 16.5 Price (a) 25.7 11.3 (37.5) — (39.9) — — (40.4) Cost (4.5) (2.2) (1.9) — (7.6) 0.2 (4.9) (20.9) Non-timber income 2.5 (0.3) 19.7 — — 0.1 — 22.0 Foreign exchange (b) — — (2.1) — — — — (2.1) Depreciation, depletion & amortization (0.7) — 0.5 — (5.3) — — (5.5) Non-cash cost of land and improved development — — — — (2.4) — — (2.4) Other (c) — 0.7 — (63.3) (8.5) — — (71.1) 2022 $96.6 $15.2 $30.6 — $58.5 $0.4 ($35.5) $165.8 (a) For Timber segments, price reflects net stumpage realizations (i.e. net of cut and haul and shipping costs).
Operating Income Southern Timber Pacific Northwest Timber New Zealand Timber Real Estate Trading Corporate and Other Total 2022 $96.6 $15.2 $30.6 $58.5 $0.4 ($35.5) $165.8 Volume 17.1 (5.5) (2.5) 43.6 — — 52.7 Price (a) (28.4) (17.6) (1.5) (45.8) — — (93.3) Cost (8.1) (5.2) (2.1) (8.5) 0.1 (3.2) (27.0) Non-timber income (b) 9.0 0.6 3.7 — — — 13.3 Foreign exchange (c) — — (0.1) — — — (0.1) Depreciation, depletion & amortization (9.9) 2.8 0.2 6.0 — (0.4) (1.3) Non-cash cost of land and improved development — — — 24.1 — — 24.1 Other — 0.7 (d) (2.3) (e) 78.7 (f) — — 77.1 2023 $76.3 ($9.0) $26.0 $156.6 $0.5 ($39.1) $211.3 (a) For Timber segments, price reflects net stumpage realizations (i.e. net of cut and haul and shipping costs).
(b) For Timber segments, price reflects net stumpage realizations (i.e. net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs. (c) Net of currency hedging impact. (d) Pacific Northwest Timber includes a $1.4 million timber reservation sale to a conservation group.
(b) For Timber segments, price reflects net stumpage realizations (i.e. net of cut and haul and shipping costs). For Real Estate, price is presented net of cash closing costs. (c) For the New Zealand Timber segment, includes carbon credit sales. (d) Net of currency hedging impact.
The decrease in export sawtimber prices primarily reflected constrained export market demand due to COVID lockdowns and construction market headwinds in China. The decrease in domestic sawtimber prices (in U.S. dollar terms) was primarily driven by the NZ$/US$ exchange rate (US$0.64 per NZ$1.00 versus US$0.71 per NZ$1.00).
The decrease in export sawtimber prices was primarily driven by weaker construction demand in China and increased salvage volume from Cyclone Gabrielle. The decrease in domestic sawtimber prices (in U.S. dollar terms) was partially driven by the decrease in the NZ$/US$ exchange rate (US$0.61 per NZ$1.00 versus US$0.64 per NZ$1.00).
Significant long-term uses of cash include the following (in millions): Future uses of cash (in millions) Total Payments Due by Period 2023 2024-2025 2026-2027 Thereafter Long-term debt (a) $1,523.1 — $21.9 $501.2 $1,000.0 Interest payments on long-term debt (b) 388.5 70.0 139.7 115.6 63.2 Operating leases — timberland (c) 194.9 8.8 16.8 15.2 154.1 Operating leases — PP&E, offices (c) 7.3 1.2 1.9 1.0 3.2 Commitments — development projects (d) 32.2 27.0 1.2 0.5 3.5 Commitments — derivatives (e) 5.9 5.5 0.4 — — Commitments — environmental remediation (f) 15.6 1.2 10.2 1.4 2.8 Commitments — other (g) 1.5 0.8 0.7 — — Total $2,169.0 $114.5 $192.8 $634.9 $1,226.8 (a) The book value of long-term debt, net of deferred financing costs and unamortized discounts, is currently recorded at $1,514.7 million on our Consolidated Balance Sheets, but upon maturity the liability will be $1,523.1 million.
Significant long-term uses of cash include the following (in millions): Future uses of cash (in millions) Total Payments Due by Period 2024 2025-2026 2027-2028 Thereafter Long-term debt (a) $1,372.7 — $247.3 $475.4 $650.0 Interest payments on long-term debt (b) 343.7 75.8 140.6 90.5 36.8 Operating leases — timberland (c) 190.9 8.9 16.0 14.8 151.2 Operating leases — PP&E, offices (c) 6.0 1.2 1.5 0.9 2.4 Commitments — real estate projects 45.0 33.4 2.3 2.3 7.0 Commitments — derivatives (d) 0.7 0.7 — — — Commitments — environmental remediation (e) 16.6 11.8 1.2 0.9 2.7 Commitments — other (f) 9.7 9.3 0.4 — — Total $1,985.3 $141.1 $409.3 $584.8 $850.1 (a) The book value of long-term debt, net of deferred financing costs and unamortized discounts, is currently recorded at $1,365.8 million on our Consolidated Balance Sheets, but upon maturity the liability will be $1,372.7 million.
(c) Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not have a demonstrable premium relative to timberland value. (d) The year ended December 31, 2021 includes $41.2 million of income from Fund II Timberland Dispositions.
(b) Large Dispositions are defined as transactions involving the sale of timberland that exceed $20 million in size and do not reflect a demonstrable premium relative to timberland value.
CASH USED FOR INVESTING ACTIVITIES Cash used for investing activities increased $490.1 million versus the prior year primarily due to higher cash used for timberland acquisitions ($279.4 million), prior year net proceeds from the sale of Timber Fund II timberlands ($154.7 million) and Timber Funds III and IV ($31.0 million), lower proceeds from Large Dispositions ($25.2 million) and higher real estate development investments ($1.2 million), partially offset by lower capital expenditures ($1.2 million) and other investing activities ($0.2 million).
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES Cash provided by investing activities increased $640.5 million versus the prior year primarily due to lower cash used for timberland acquisitions ($444.5 million), higher proceeds from Large Dispositions ($210.4 million) and other investing activities ($1.6 million), partially offset by higher real estate development investments ($9.4 million) and higher capital expenditures ($6.6 million).
In addition to market dynamics in the Pacific Rim, the New Zealand Timber segment is subject to foreign exchange fluctuations, which can impact the operating results of the segment in U.S. dollar terms. During 2022, global log and lumber markets experienced increased volatility due in part to Russia’s invasion of Ukraine and subsequent sanctions placed on Russia.
In addition to market dynamics in the Pacific Rim, the New Zealand Timber segment is subject to foreign exchange fluctuations, which can impact the operating results of the segment in U.S. dollar terms.
Average delivered prices for export sawtimber decreased 10% to $124.91 per ton versus $138.84 per ton in the prior year, while average delivered prices for domestic sawtimber decreased 14% to $71.87 per ton versus $83.19 per ton in the prior year.
Average delivered prices for export sawtimber decreased 18% to $102.39 per ton versus $124.91 per ton in the prior year, while average delivered prices for domestic sawtimber decreased 8% to $66.31 per ton versus 46 Table of Contents $71.87 per ton in the prior year.
Operating income of $15.2 million improved $8.4 million versus the prior year, primarily due to higher net stumpage realizations ($11.3 million) and a timber reservation sale to a conservation group ($1.4 million), partially offset by higher costs ($2.2 million), lower volumes ($1.1 million), a timber write-off resulting from casualty events ($0.7 million), and lower non-timber income ($0.3 million).
Operating income of $26.0 million decreased $4.6 million versus the prior year due to lower volumes ($2.5 million), timber write-offs resulting from casualty events in the current year ($2.3 million), higher costs ($2.1 million), lower net stumpage realizations ($1.5 million), and unfavorable foreign exchange impacts ($0.1 million), partially offset by higher non-timber / carbon credit income ($3.7 million) and lower depletion rates ($0.2 million).
While higher interest rates caused demand for certain rural properties to moderate during the second half of 2022, favorable migration and demographic trends continue to benefit our improved development properties, specifically Wildlight, our development project north of Jacksonville, Florida, and Heartwood, our development project south of Savannah, Georgia.
Our improved development projects, specifically Wildlight, our development project north of Jacksonville, Florida, and Heartwood, our development project south of Savannah, Georgia, continue to benefit from favorable migration and demographic trends, which have thus far outweighed the impacts of higher interest rates.
(g) Costs related to the merger with Pope Resources include legal, accounting, due diligence, consulting and other costs related to the merger with Pope Resources. 54 Table of Contents Cash Available for Distribution (CAD) is defined as cash provided by operating activities adjusted for capital spending (excluding timberland acquisitions and real estate development investments), CAD attributable to noncontrolling interests in Timber Funds, and working capital and other balance sheet changes.
(f) Fund II Timberland Dispositions represent the disposition of Fund II Timberland assets, which we managed and owned a co-investment stake in. 55 Table of Contents Cash Available for Distribution (CAD) is defined as cash provided by operating activities adjusted for capital spending (excluding timberland acquisitions and real estate development investments), CAD attributable to noncontrolling interests in Timber Funds, and working capital and other balance sheet changes.
Full-year Adjusted EBITDA of $63.9 million was $6.6 million above the prior year. NEW ZEALAND TIMBER Full-year sales of $274.1 million decreased $7.1 million, or 3%, versus the prior year.
Full-year Adjusted EBITDA of $27.9 million was $36.0 million below the prior year. NEW ZEALAND TIMBER Full-year sales of $235.5 million decreased $38.6 million, or 14%, versus the prior year.
TRADING Full-year sales of $71.0 million decreased $24.4 million versus the prior year due to lower volumes and prices. Sales volumes decreased 21% to 559,000 tons versus 706,000 tons in the prior year. Operating income and Adjusted EBITDA increased $0.2 million versus the prior year.
TRADING Full-year sales of $43.7 million decreased $27.3 million versus the prior year due to lower volumes and prices. Sales volumes decreased 32% to 378,000 tons versus 559,000 tons in the prior year. Operating income and Adjusted EBITDA increased $0.1 million versus the prior year as improved margins more than offset reduced trading volume.
(b) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. (c) The year ended December 31, 2022 includes $16.0 million of equity income from the sale of a multi-family apartment complex in Bainbridge Island, Washington and $16.6 million from Large Dispositions.
(b) Includes deferred revenue adjustments, revenue true-ups and marketing fees related to Improved Development sales in addition to residential and commercial lease revenue. (c) The year ended December 31, 2022 includes $0.7 million of timber write-offs resulting from casualty events. (d) The year ended December 31, 2023 includes $2.3 million of timber write-offs resulting from casualty events.
Operating income of $96.6 million increased $30.5 million versus the prior year due to higher net stumpage realizations ($25.7 million), higher volumes ($7.5 million), and higher non-timber income ( $2.5 million ), partially offset by higher costs ( $4.5 million ) and higher depletion rates ( $0.7 million) .
An operating loss of $9.0 million versus operating income of $15.2 million in the prior year was driven by lower net stumpage realizations ($17.6 million), lower volumes ($5.5 million) and higher costs ($5.2 million), partially offset by lower depletion rates ($2.8 million), timber write-offs resulting from casualty events in the prior year ($0.7 million), and higher non-timber income ($0.6 million).
Sales decreased primarily due to lower volumes (28,323 acres sold versus 32,371 acres sold in the prior year) and lower weighted average prices ($4,829 per acre versus $5,820 per acre in the prior year). Full-year Adjusted EBITDA of $72.7 million was $28.0 million below the prior year.
Sales increased primarily due to significantly higher volumes (85,618 acres sold versus 28,323 acres sold in the prior year), partially offset by lower weighted average prices ($4,392 per acre versus $4,829 per acre in the prior year). Full-year Adjusted EBITDA of $99.3 million was $26.6 million above the prior year.
Total 2021 $204.4 $143.0 $281.2 $199.4 $189.9 $95.4 ($3.7) $1,109.6 Volume 13.1 (4.1) 1.4 — 12.9 (19.5) — 3.8 Price 25.7 11.3 (37.5) — (39.9) (4.8) — (45.2) Non-timber sales 3.0 (0.3) 20.0 — — 0.1 — 22.8 Foreign exchange (a) — — (7.5) — — — — (7.5) Other 18.0 (b) 12.3 (b) 16.5 (c) (199.4) (24.9) (d) (0.2) 3.3 (e) (174.4) 2022 $264.2 $162.2 $274.1 — $138.0 $71.0 ($0.4) $909.1 (a) Net of currency hedging impact.
Total 2022 $264.2 $162.2 $274.1 $138.0 $71.0 ($0.4) $909.1 Volume 27.2 (15.7) (13.4) 76.3 (22.4) — 52.0 Price (28.4) (17.6) (1.5) (45.8) (5.0) — (98.3) Non-timber sales 9.9 0.7 4.2 — 0.1 — 14.9 Foreign exchange (a) — — (3.0) — — — (3.0) Other (8.8) (b) (5.5) (b) (24.9) (c) 221.5 (d) — (0.1) 182.2 2023 $264.1 $124.1 $235.5 $390.0 $43.7 ($0.5) $1,056.9 (a) Net of currency hedging impact.
Short-term borrowings have helped fund working capital needs, while acquisitions of timberlands generally require funding from external sources or Large Dispositions. STRATEGY We continuously evaluate our capital structure.
Our operations have generally produced consistent cash flow and required limited capital resources; however, acquisitions of timberlands generally require funding from external sources or Large Dispositions. STRATEGY We continuously evaluate our capital structure.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+1 added−1 removed4 unchanged
Biggest changeAt this current borrowing and derivatives level, a hypothetical one-percentage point increase/decrease in interest rates would result in a corresponding increase/decrease in interest payments and expense of approximately $1.5 million over a 12-month period. The fair market value of our fixed interest rate debt is also subject to interest rate risk.
Biggest changeWe have entered into an interest rate swap agreement to cover $100 million of borrowings under the 2022 Incremental Term Loan Facility through the maturity date in December 2027. At this current borrowing and derivatives level, a hypothetical one-percentage point increase/decrease in interest rates would result in no corresponding increase/decrease in interest payments and expense over a 12-month period.
(b) Interest rates as of December 31, 2022. Foreign Currency Exchange Rate Risk The New Zealand subsidiary’s export sales are predominantly denominated in U.S. dollars, and therefore its cash flows are affected by fluctuations in the exchange rate between the New Zealand dollar and the U.S. dollar.
(b) Interest rates as of December 31, 2023. Foreign Currency Exchange Rate Risk The New Zealand subsidiary’s export sales are predominantly denominated in U.S. dollars, and therefore its cash flows are affected by fluctuations in the exchange rate between the New Zealand dollar and the U.S. dollar.
Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise. A hypothetical one-percentage point increase/decrease in prevailing interest rates at December 31, 2022 would result in a corresponding decrease/increase in the fair value of our fixed rate debt of approximately $27 million and $30 million, respectively.
Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise. A hypothetical one-percentage point increase/decrease in prevailing interest rates at December 31, 2023 would result in a corresponding decrease/increase in the fair value of our fixed rate debt of approximately $25 million and $27 million, respectively.
Interest Rate Risk Due to the upcoming discontinuation of LIBOR on June 30, 2023, we amended our outstanding variable rate debt agreements and active interest rate swaps to change the interest rate benchmark from LIBOR to Daily Simple SOFR in December 2022. Our forward-starting interest rate swap agreements continue to use LIBOR as the interest rate benchmark.
Interest Rate Risk Due to the discontinuation of LIBOR on June 30, 2023, we amended our outstanding variable rate debt agreements and active interest rate swaps to change the interest rate benchmark from LIBOR to Daily Simple SOFR in December 2022.
Sales and Expense Exposure At December 31, 2022, the New Zealand subsidiary had foreign currency exchange contracts with a notional amount of $138.3 million and foreign currency option contracts with a notional amount of $78.0 million outstanding related to foreign export sales.
Sales and Expense Exposure At December 31, 2023, the New Zealand subsidiary had foreign currency exchange contracts with a notional amount of $123 million and foreign currency option contracts with a notional amount of $98 million outstanding related to foreign export sales.
We estimate the periodic effective interest rate on our U.S. long-term fixed and variable rate debt to be approximately 3.0% after consideration of interest rate swaps and estimated patronage refunds and excluding unused commitment fees on the revolving credit facility. 56 Table of Contents The following table summarizes our outstanding debt, interest rate swaps and average interest rates, by year of expected maturity and their fair values at December 31, 2022: (Dollars in thousands) 2023 2024 2025 2026 2027 Thereafter Total Fair Value Variable rate debt: Principal amounts — — — $200,000 $250,000 $550,000 $1,000,000 $1,000,000 Average interest rate (a)(b) — — — 5.54% 5.21% 5.41% 5.38% Fixed rate debt: Principal amounts — — $21,931 $25,586 $25,586 $450,000 $523,103 $438,736 Average interest rate (b) — — 2.95% 3.64% 6.48% 2.75% 2.98% Interest rate swaps: Notional amount — $350,000 — $200,000 $100,000 $200,000 $850,000 $60,792 Average pay rate (b) — 2.18% — 1.50% 3.72% 0.67% 1.85% Average receive rate (b) — 4.01% — 3.99% 3.99% 3.99% 4.00% Forward-starting interest rate swaps Notional amount — — — — — $150,000 $150,000 $11,939 Average pay rate (b) — — — — — 0.83% 0.83% Average receive rate (b) — — — — — 4.30% 4.30% (a) Excludes estimated patronage refunds.
We estimate the periodic effective interest rate on our U.S. long-term fixed and variable rate debt to be approximately 2.7% after consideration of interest rate swaps and estimated patronage refunds and excluding unused commitment fees on the revolving credit facility. 57 Table of Contents The following table summarizes our outstanding debt, interest rate swaps and average interest rates, by year of expected maturity and their fair values at December 31, 2023: (Dollars in thousands) 2024 2025 2026 2027 2028 Thereafter Total Fair Value Variable rate debt: Principal amounts — — $200,000 $100,000 $350,000 $200,000 $850,000 $850,000 Average interest rate (a)(b) — — 7.08% 7.03% 7.03% 6.98% 7.03% Fixed rate debt: Principal amounts — $21,817 $25,453 $25,453 — $450,000 $522,723 $449,951 Average interest rate (b) — 2.95% 3.64% 6.48% — 2.75% 2.98% Interest rate swaps: Notional amount $350,000 — $200,000 $100,000 — $200,000 $850,000 $43,179 Average pay rate (b) 2.18% — 1.50% 3.72% — 0.67% 1.85% Average receive rate (b) 5.33% — 5.33% 5.33% — 5.33% 5.33% Forward-starting interest rate swaps Notional amount — — — — $200,000 — $200,000 $12,782 Average pay rate (b) — — — — 1.37% — 1.37% Average receive rate (b) — — — — 5.33% — 5.33% (a) Excludes estimated patronage refunds.
The estimated fair value of our fixed rate debt at December 31, 2022 was $438.7 million compared to the $523.1 million principal amount. We use interest rates of debt with similar terms and maturities to estimate the fair value of our debt.
The fair market value of our fixed interest rate debt is also subject to interest rate risk. The estimated fair value of our fixed rate debt at December 31, 2023 was $450.0 million compared to the $522.7 million principal amount. We use interest rates of debt with similar terms and maturities to estimate the fair value of our debt.
The Incremental Term Loan Agreement and associated interest rate swaps mature in May 2026, and the 2021 Incremental Term Loan Facility and associated interest rate swaps mature in June 2029. We have entered into an interest rate swap agreement to cover $100 million of borrowings under the 2022 Incremental Term Loan Facility through the maturity date in December 2027.
We have entered into forward starting interest rate swaps to cover $200 million of the 2015 Term Credit Facility through the extended maturity date. The 2016 Incremental Term Loan Facility and associated interest rate swaps mature in May 2026, and the 2021 Incremental Term Loan Facility and associated interest rate swaps mature in June 2029.
We are exposed to interest rate risk through our variable rate debt, primarily due to changes in SOFR. However, we use interest rate swaps to manage our exposure to interest rate movements on our term credit agreements by swapping existing and anticipated future borrowings from floating rates to fixed rates.
However, we use interest rate swaps to manage our exposure to interest rate movements on our term credit agreements by swapping existing and anticipated future borrowings from floating rates to fixed rates. As of December 31, 2023, we had $850 million of U.S. long-term variable rate debt outstanding on our term credit agreements.
The following table summarizes our outstanding foreign currency exchange rate risk contracts at December 31, 2022: (Dollars in thousands) 0-1 months 1-2 months 2-3 months 3-6 months 6-12 months 12-18 months 18-24 months 24-36 months Total Fair Value Foreign exchange contracts to sell U.S. dollar for New Zealand dollar Notional amount $14,500 $9,250 $10,000 $23,000 $36,500 $26,000 $10,000 $9,000 $138,250 ($4,539) Average contract rate 1.4566 1.4650 1.4556 1.4771 1.5050 1.5749 1.6698 1.7088 1.5274 Foreign currency option contracts to sell U.S. dollar for New Zealand dollar Notional amount — — — $2,000 $12,000 $6,000 $20,000 $38,000 $78,000 $569 Average strike price — — — 1.4744 1.4941 1.5684 1.6416 1.6946 1.6348 57 Table of Contents
The following table summarizes our outstanding foreign currency exchange rate risk contracts at December 31, 2023: (Dollars in thousands) 0-1 months 1-2 months 2-3 months 3-6 months 6-12 months 12-18 months 18-24 months 24-36 months Total Fair Value Foreign exchange contracts to sell U.S. dollar for New Zealand dollar Notional amount $7,200 $5,000 $6,000 $21,000 $25,000 $16,500 $13,000 $29,000 $122,700 $2,916 Average contract rate 1.5529 1.5211 1.5398 1.6043 1.6310 1.6805 1.6392 1.6652 1.6285 Foreign currency option contracts to sell U.S. dollar for New Zealand dollar Notional amount $2,000 $2,000 $2,000 $4,000 $20,000 $24,000 $16,000 $28,000 $98,000 $1,572 Average strike price 1.5666 1.5686 1.5701 1.6276 1.6416 1.6602 1.7481 1.6811 1.6698 58 Table of Contents
As of December 31, 2022, we had $1 billion of U.S. long-term variable rate debt outstanding on our term credit agreements. The notional amount of outstanding interest rate swap contracts with respect to our term credit agreements at December 31, 2022 was $850 million.
The notional amount of outstanding interest rate swap contracts with respect to our term credit agreements at December 31, 2023 was also $850 million. The $350 million 2015 Term Credit Facility matures in April 2028, with the associated interest rate swaps maturing in August 2024.
Removed
The Term Credit Agreement matures in April 2028, with the associated interest rate swaps maturing in August 2024. We have entered into forward starting interest rate swaps to cover $150 million of the Term Credit Agreement through the extended 2028 maturity date.
Added
In March 2023, we modified our benchmark rates from LIBOR to Daily Simple SOFR for our forward-starting interest rate swaps. We are exposed to interest rate risk through our variable rate debt due to changes in SOFR.

Other RYN 10-K year-over-year comparisons