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Rayonier Buys 56,300 Acres of Timberland in Washington
Jacksonville, Florida, USA, 08 April 2008 --(BUSINESS WIRE)-- Rayonier (NYSE:RYN) said today that it has completed the previously announced purchase of 56,300 acres of timberland in southwest Washington from Sierra Pacific Industries. After adjustments, the final purchase price was USD 213.4 million or USD 3790 per acre. Rayonier's Washington holdings now total more than 426,000 acres.

The timberlands are heavily stocked with 319 million board feet of merchantable timber, increasing Rayonier's Western region inventory by 27%. The acquisition also significantly improves Rayonier's inventory of higher value species, reflecting the property's mix of 41% Douglas fir and 55% hemlock.

"The acquisition of these highly productive timberlands reflects our continued commitment to disciplined, strategic growth," said Lee M. Thomas, Rayonier chairman, president, and CEO. "We have significantly increased our merchantable timber and have achieved greater scale in the Northwest."

The transaction is structured as part of a tax-efficient like-kind exchange through which the company expects to realize tax benefits of approximately USD 36 million in the next three years (2008-2010). Funding for the purchase was provided through a combination of cash on hand and borrowings from Rayonier's existing revolving credit facility.

Based on conservative harvest assumptions reflecting current market conditions, the acquisition is expected to be slightly cash accretive (USD 0.01 to USD 0.02 per share) in 2008 and 2009, with projected increases thereafter as timber markets recover. However, earnings per share dilution of approximately USD 0.06 per share is expected in 2008, primarily due to noncash depletion expense.

Rayonier manages its Washington timberlands in accordance with the Sustainable Forestry Initiative(R) and intends to certify the acquired timberlands.

Headquartered in Jacksonville, Florida, Rayonier is a leading international forest products company with three core businesses: Timber, Real Estate, and Performance Fibers. The company owns, leases, or manages 2.6 million acres of timber and land in the United States and New Zealand. The company's real estate holdings include approximately 200,000 acres in the fast-growing counties along Interstate 95 between Savannah, Georgia, and Daytona Beach, Florida. Rayonier is structured as a real estate investment trust.

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