FAIR VALUE MEASUREMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
A three-level hierarchy that prioritizes the inputs used to measure fair value was established in the Accounting Standards Codification as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table presents the carrying amount and estimated fair values of our financial instruments at December 31, 2025 and 2024, using market information valuation methodologies we believe are appropriate under GAAP:
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| | December 31, 2025 | | December 31, 2024 |
| Carrying
Amount | | Fair Value | | Carrying
Amount | | Fair Value |
| Asset (Liability) (a) | | Level 1 | | Level 2 | | | Level 1 | | Level 2 |
| Cash and cash equivalents | $842,944 | | | $842,944 | | | — | | | $303,065 | | | $303,065 | | | — | |
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| Restricted cash, current (b) | — | | | — | | | — | | | 19,366 | | | 19,366 | | | — | |
| Restricted cash, non-current (b) | 495 | | | 495 | | | — | | | 676 | | | 676 | | | — | |
| Current maturities of long-term debt (c) | (199,982) | | | — | | | (200,000) | | | — | | | — | | | — | |
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| Long-term debt (c) | (845,335) | | | — | | | (806,080) | | | (1,044,410) | | | — | | | (980,970) | |
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| Interest rate swaps (d) | 26,819 | | | — | | | 26,819 | | | 49,353 | | | — | | | 49,353 | |
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| Noncontrolling interests in the Operating Partnership (e) | 40,463 | | | — | | | 36,435 | | | 51,843 | | | — | | | 51,843 | |
(a)We did not have Level 3 assets or liabilities at December 31, 2025 and 2024.
(b)Restricted cash includes proceeds from like-kind exchange sales held by a third-party intermediary and cash held in escrow. See Note 22 — Restricted Cash for additional information. (c)The carrying amount of long-term debt is presented net of deferred financing costs and unamortized discounts on non-revolving debt. See Note 8 — Debt for additional information. (e)Noncontrolling interests in the Operating Partnership, representing ownership of Rayonier, L.P. units by parties other than the Company, are classified as temporary equity and are neither assets nor liabilities on the Company’s Consolidated Balance Sheets. See Note 6 — Noncontrolling Interests for additional information. We use the following methods and assumptions in estimating the fair value of our financial instruments:
Cash and cash equivalents and Restricted cash — The carrying amount is equal to fair market value.
Debt — The fair value of fixed-rate debt is determined using quoted market prices for debt with comparable terms and maturities. For variable-rate debt, the carrying value approximates fair value as the interest rate adjusts with market changes.
Interest rate swap agreements — The fair value of interest rate contracts is determined by discounting the expected future cash flows for each instrument at prevailing interest rates.
Noncontrolling interests in the Operating Partnership — The fair value of noncontrolling interests in the Operating Partnership is determined by using the period-end closing price of Rayonier Inc. common shares.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.