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Income Taxes (Notes) | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income Taxes [Text Block] |
8. | INCOME TAXES
In general, only the taxable REIT subsidiaries, whose businesses include the Company's non-REIT qualified activities, are subject to corporate income taxes. However, the Company is subject to U.S. federal corporate income tax on built-in gains (the excess of fair market value over tax basis for property held upon REIT election at January 1, 2004) on taxable sales of such property during calendar years 2004 through 2010. In 2011, the law provided a built-in gains tax holiday. In 2013, the law provided a built-in gains tax holiday for 2012 (retroactive) and 2013 which will impact the Company's 2013 tax provision. Accordingly, the provision for corporate income taxes relates principally to current and deferred taxes on TRS income and certain property sales. Like-Kind Exchanges Under current tax law, the built-in gain tax from the sale of REIT property can be deferred and eliminated if sale proceeds from "relinquished" properties are reinvested in similar property consistent with the LKE requirements of the U.S. Internal Revenue Code, as long as the "replacement" property is owned through the end of the built-in gain period (10-year period which began on January 1, 2004). The LKE requirements do not restrict the Company’s ability to harvest timber on a pay-as-cut basis from such replacement property during the built-in gain period. Alternative Fuel Mixture Credit ("AFMC") and Cellulosic Biofuel Producer Credit ("CBPC") The U.S. Internal Revenue Code allowed two credits for taxpayers that produced and used an alternative fuel in the operation of their business through December 31, 2009. The AFMC was a $0.50 per gallon refundable excise tax credit (which is not taxable), while the CBPC was a $1.01 per gallon credit that is nonrefundable, taxable and has limitations based on an entity's tax liability. Rayonier produces and uses an alternative fuel ("black liquor") at its Jesup, Georgia and Fernandina Beach, Florida performance fibers mills, which qualified for both credits. Rayonier claimed the AFMC on its 2009 income tax return, and accordingly, recognized $205.2 million of income, net of associated expenses, for black liquor produced and used. In October 2010, the Internal Revenue Service ("IRS") issued clarification that both the AFMC and CBPC can be claimed in the same taxable year for different volumes of black liquor. As a result, the 2010 Consolidated Statement of Income and Comprehensive Income includes a tax credit of $24.3 million recorded in "income tax expense" for black liquor produced and used in 2009, which was not eligible for the AFMC. In 2012 and 2011, management approved exchanges of black liquor gallons previously claimed under the AFMC for the CBPC. The net tax benefit from these exchanges was $12.2 million and $5.8 million, respectively. Provision for Income Taxes The (provision for)/benefit from income taxes consisted of the following:
| 2012 |  | 2011 |  | 2010
Current |  |  |  |  |
U.S. federal | $ | (80,029 | ) |  | $ | (26,893 | ) |  | $ | 973 |
State | (4,569 | ) |  | (624 | ) |  | (12 | )
Foreign | (288 | ) |  | (342 | ) |  | (1,242 | )
| (84,886 | ) |  | (27,859 | ) |  | (281 | )
Deferred |  |  |  |  |
U.S. federal | (2,598 | ) |  | (2,079 | ) |  | (14,554 | )
State | (595 | ) |  | (1,066 | ) |  | (1,283 | )
Foreign | (55 | ) |  | (32 | ) |  | 69 |
| (3,248 | ) |  | (3,177 | ) |  | (15,768 | )
Changes in valuation allowance | (257 | ) |  | 679 |  |  | 832 |
Total | $ | (88,391 | ) |  | $ | (30,357 | ) |  | $ | (15,217 | )
A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate was as follows:
|  | 2012 |  | 2011 |  | 2010
U.S. federal statutory income tax rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
REIT income not subject to federal tax |  | (7.1 | ) |  | (10.4 | ) |  | (16.8 | )
Income tax rate at federal statutory rates |  | 27.9 | % |  | 24.6 | % |  | 18.2 | %
Installment note prepayment |  | — |  |  | (3.7 | ) |  | — |
Built-in gains tax holiday |  | — |  |  | (1.9 | ) |  | — |
CBPC |  | — |  |  | — |  |  | (10.5 | )
CBPC for AFMC exchange |  | (3.3 | ) |  | (1.9 | ) |  | — |
Taxing authority settlements and unrecognized tax benefit adjustments |  | — |  |  | (5.3 | ) |  | (1.1 | )
Other |  | (0.5 | ) |  | (1.9 | ) |  | (0.1 | )
Income tax rate as reported |  | 24.1 | % |  | 9.9 | % |  | 6.5 | %
The effective tax rate, at federal statutory rates, increased in 2012 and 2011 compared to the respective prior year periods due to proportionally higher TRS income. The Company's effective tax rate is below the 35 percent U.S. statutory rate primarily due to tax benefits associated with being a REIT, and the CBPC and AFMC. Deferred Taxes Deferred income taxes result from recording revenues and expenses in different periods for financial reporting versus tax reporting. The nature of the temporary differences and the resulting net deferred tax asset (liability) for the two years ended December 31, were as follows:
| 2012 |  | 2011
Gross deferred tax assets: |  |  |
Liabilities for dispositions and discontinued operations | $ | 29,944 |  |  | $ | 33,295 |
Pension, postretirement and other employee benefits | 66,354 |  |  | 62,382 |
Foreign and state NOL carryforwards | 18,023 |  |  | 17,796 |
Tax credit carryforwards | 4,429 |  |  | 4,443 |
Other | 8,736 |  |  | 13,615 |
Total gross deferred tax assets | 127,486 |  |  | 131,531 |
Less: Valuation allowance | (19,294 | ) |  | (18,811 | )
Total deferred tax assets after valuation allowance | 108,192 |  |  | 112,720 |
Gross deferred tax liabilities: |  |  |
Accelerated depreciation | (61,414 | ) |  | (62,594 | )
Repatriation of foreign earnings | (5,428 | ) |  | (5,030 | )
Other | (4,461 | ) |  | (4,021 | )
Total gross deferred tax liabilities | (71,303 | ) |  | (71,645 | )
Net deferred tax asset | $ | 36,889 |  |  | $ | 41,075 |
Current portion of deferred tax asset | $ | 15,845 |  |  | $ | 17,133 |
Noncurrent portion of deferred tax asset | 26,792 |  |  | 30,211 |
Noncurrent portion of deferred tax liability | (5,748 | ) |  | (6,269 | )
Net deferred tax asset | $ | 36,889 |  |  | $ | 41,075 |
Included above are the following foreign and state net operating loss ("NOL") and tax credit carryforwards as of December 31, 2012:
Item | Gross Amount |  | Valuation Allowance |  | Expiration
New Zealand NOL Carryforwards (a) | $ | 17,394 |  |  | $ | (4,781 | ) |  | None
State NOL Carryforwards (a) | 233,023 |  |  | (13,242 | ) |  | 2013 - 2018
State and Foreign Tax Credits | 3,099 |  |  | (1,271 | ) |  | 2013 - 2018
Cellulosic Biofuel Producer Credit | 1,330 |  |  | — |  |  | 2016
Total Valuation Allowance |  |  | $ | (19,294 | ) |  |
(a) Fully reserved at December 31, 2012. In 2012 and 2011, the Company recorded excess tax benefits of $7.6 million and $5.7 million, respectively, related to stock-based compensation. These amounts were credited directly to shareholders’ equity and were not included in the consolidated tax provision. Unrecognized Tax Benefits In accordance with generally accepted accounting principles, we recognize the impact of a tax position if a position is "more likely than not" to prevail. A reconciliation of the beginning and ending unrecognized tax benefits for the three years ended December 31 is as follows:
| 2012 |  | 2011 |  | 2010
Balance at January 1, | $ | 6,580 |  |  | $ | 22,580 |  |  | $ | 17,973 |
Decreases related to prior year tax positions | — |  |  | (16,000 | ) | (a) | (1,057 | )
Increases related to current year tax positions | — |  |  | — |  |  | 5,780 |
Payments | — |  |  | — |  |  | (116 | )
Balance at December 31, | $ | 6,580 |  |  | $ | 6,580 |  |  | $ | 22,580 |
(a) | During 2011, the Company received a final examination report from the IRS regarding its TRS 2009 tax return. As a result, Rayonier reversed the uncertain tax liability recorded in 2009 relating to the taxability of the AFMC and recognized a $16 million tax benefit in the third quarter of 2011.
The total amount of unrecognized tax benefits that, if recognized, would have affected the effective tax rate at December 31, 2012, 2011 and 2010 are $2.6 million, $2.6 million and $18.6 million, respectively. At December 31, 2012, the amount of unrecognized tax benefits that, if recognized, would decrease prepaid tax assets are $4.0 million. Prepaid tax assets are reported in "Other assets" on the Company's Consolidated Balance Sheets. The Company records interest (and penalties, if applicable) related to unrecognized tax benefits in non-operating expenses. For the year ended December 31, 2012, the Company recorded interest expense of $0.2 million. For the years ended December 31, 2011 and 2010, the Company recorded an interest benefit of $0.3 million. The Company has liabilities of approximately $0.4 million and $0.2 million for the payment of interest at December 31, 2012 and 2011, respectively. Tax Statutes The following table provides detail of the tax years that remain open to examination by the IRS and other significant taxing jurisdictions:
Taxing Jurisdiction | Open Tax Years
U.S. Internal Revenue Service | 2009 – 2012
State of Alabama | 2009 – 2012
State of Florida | 2005 – 2006, 2009 – 2012
State of Georgia | 2009 – 2012
New Zealand Inland Revenue | 2008 – 2012

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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