-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EsYTD/sei/BYnwdszmZxRNtKPL7SgwyeGaS4dEhyYRDJ7TFTjLBdUACYOMQTCT+k 52IyMMLHVUQ2TYvdntQEVA== 0000950123-99-007599.txt : 19990816 0000950123-99-007599.hdr.sgml : 19990816 ACCESSION NUMBER: 0000950123-99-007599 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAYONIER INC CENTRAL INDEX KEY: 0000052827 STANDARD INDUSTRIAL CLASSIFICATION: LUMBER & WOOD PRODUCTS (NO FURNITURE) [2400] IRS NUMBER: 132607329 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06780 FILM NUMBER: 99686873 BUSINESS ADDRESS: STREET 1: 1177 SUMMER ST CITY: STAMFORD STATE: CT ZIP: 06904 BUSINESS PHONE: 2033487000 MAIL ADDRESS: STREET 1: 1177 SUMMER STREET CITY: STAMFORD STATE: CT ZIP: 06905-5529 FORMER COMPANY: FORMER CONFORMED NAME: ITT RAYONIER INC /CT/ DATE OF NAME CHANGE: 19940422 FORMER COMPANY: FORMER CONFORMED NAME: ITT RAYONIER INC DATE OF NAME CHANGE: 19920703 10-Q 1 RAYONIER INC 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ........... TO ............ COMMISSION FILE NUMBER 1-6780 RAYONIER INC. Incorporated in the State of North Carolina I.R.S. Employer Identification Number l3-2607329 l177 Summer Street, Stamford, Connecticut 06905-5529 (Principal Executive Office) Telephone Number: (203) 348-7000 Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during the preceding l2 months and (2) has been subject to such filing requirements for the past 90 days. YES (X) NO ( ) As of August 3, 1999, there were outstanding 27,765,142 Common Shares of the Registrant. 2 RAYONIER INC. TABLE OF CONTENTS
PAGE ---- PART I. FINANCIAL INFORMATION Item l. Financial Statements Statements of Consolidated Income for the Three Months and Six Months Ended June 30, 1999 and 1998 1 Consolidated Balance Sheets as of June 30, 1999 and December 3l, 1998 2 Statements of Consolidated Cash Flows for the Six Months Ended June 30, 1999 and 1998 3 Notes to Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5-8 Item 3. Selected Operating Data 9 Selected Supplemental Financial Data 10 PART II. OTHER INFORMATION Item 1. Legal Proceedings 11 Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K 11 Signature 11 Exhibit Index 12
i 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following unaudited financial statements reflect, in the opinion of Rayonier Inc. (Rayonier or the Company), all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results of operations, the financial position and the cash flows for the periods presented. For a full description of accounting policies, please refer to Notes to Consolidated Financial Statements in the l998 Annual Report on Form l0-K. RAYONIER INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED) (THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
Three Months Six Months Ended June 30, Ended June 30, -------------------------- -------------------------- 1999 1998 1999 1998 --------- --------- --------- --------- SALES $ 258,023 $ 254,011 $ 484,419 $ 479,425 --------- --------- --------- --------- Costs and expenses Cost of sales 215,198 210,301 403,879 394,480 Selling and general expenses 9,785 9,412 19,250 17,759 Other operating income, net (711) (874) (1,905) (2,143) --------- --------- --------- --------- 224,272 218,839 421,224 410,096 --------- --------- --------- --------- OPERATING INCOME 33,751 35,172 63,195 69,329 Interest expense (7,683) (9,072) (15,387) (16,984) Interest and miscellaneous (expense) income, net (233) 202 481 497 --------- --------- --------- --------- Income before income taxes 25,835 26,302 48,289 52,842 Provision for income taxes (8,758) (7,862) (16,082) (16,206) --------- --------- --------- --------- NET INCOME $ 17,077 $ 18,440 $ 32,207 $ 36,636 ========= ========= ========= ========= NET INCOME PER COMMON SHARE Basic EPS $ 0.62 $ 0.65 $ 1.16 $ 1.29 ========= ========= ========= ========= Diluted EPS $ 0.60 $ 0.64 $ 1.14 $ 1.27 ========= ========= ========= =========
1 4 RAYONIER INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (THOUSANDS OF DOLLARS) ASSETS
June 30, December 31, 1999 1998 ---------- ---------- CURRENT ASSETS Cash and short-term investments $ 5,717 $ 6,635 Accounts receivable, less allowance for doubtful accounts of $4,863 and $4,843 108,332 118,762 Inventories Finished goods 58,901 47,109 Work in process 12,659 15,762 Raw materials 11,484 13,212 Manufacturing and maintenance supplies 24,846 22,827 ---------- ---------- Total inventories 107,890 98,910 Timber purchase agreements 37,914 35,776 Other current assets 13,540 13,192 Deferred income taxes 7,180 8,559 ---------- ---------- Total current assets 280,573 281,834 OTHER ASSETS 61,248 65,988 TIMBER PURCHASE AGREEMENTS 21,284 20,922 TIMBER, TIMBERLANDS AND LOGGING ROADS, NET OF DEPLETION AND AMORTIZATION 544,807 544,190 PROPERTY, PLANT AND EQUIPMENT Land, buildings, machinery and equipment 1,327,668 1,304,188 Less - accumulated depreciation 646,723 616,266 ---------- ---------- 680,945 687,922 ---------- ---------- $1,588,857 $1,600,856 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 70,124 $ 65,844 Bank loans and current maturities 5,965 4,094 Accrued taxes 15,841 8,728 Accrued payroll and benefits 23,536 21,460 Accrued interest 7,586 6,182 Other current accrued liabilities 41,552 44,279 Current reserves for dispositions and discontinued operations 19,732 22,167 ---------- ---------- Total current liabilities 184,336 172,754 DEFERRED INCOME TAXES 122,462 115,405 LONG-TERM DEBT 446,404 485,850 NON-CURRENT RESERVES FOR DISPOSITIONS AND DISCONTINUED OPERATIONS 154,062 159,198 OTHER NON-CURRENT LIABILITIES 30,274 28,690 SHAREHOLDERS' EQUITY Common Shares, 60,000,000 shares authorized, 27,772,207 and 27,767,309 shares issued and outstanding 76,958 79,561 Retained earnings 574,361 559,398 ---------- ---------- 651,319 638,959 ---------- ---------- $1,588,857 $1,600,856 ========== ==========
2 5 RAYONIER INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED) (THOUSANDS OF DOLLARS)
Six Months Ended June 30, -------------------------- 1999 1998 --------- --------- OPERATING ACTIVITIES Net income $ 32,207 $ 36,636 Non-cash items included in income Depreciation, depletion and amortization 50,124 47,760 Deferred income taxes 5,663 8 Increase in other non-current liabilities 1,584 1,270 Change in accounts receivable, inventories and accounts payable 5,730 (6,100) Increase in current timber purchase agreements (2,138) (7,600) (Increase) decrease in other current assets (348) 2,670 Increase (decrease) in accrued liabilities 7,866 (13,243) --------- --------- CASH FROM OPERATING ACTIVITIES 100,688 61,401 --------- --------- INVESTING ACTIVITIES Capital expenditures, net of sales and retirements of $311 and $2,186 (43,764) (48,686) Acquisition of Rayonier Timberlands, L.P. Class A Units -- (48,821) Expenditures for dispositions and discontinued operations, net of tax benefits of $2,773 and $2,504 (4,798) (4,321) Change in timber purchase agreements and other assets 4,378 (8,325) --------- --------- CASH USED FOR INVESTING ACTIVITIES (44,184) (110,153) --------- --------- FINANCING ACTIVITIES Issuance of debt 99,861 183,910 Repayments of debt (137,436) (89,027) Dividends paid (17,244) (17,539) Repurchase of Common Shares (5,600) (8,710) Issuance of Common Shares 2,997 2,038 Buyout of minority interest -- (16,959) --------- --------- CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES (57,422) 53,713 --------- --------- CASH AND SHORT-TERM INVESTMENTS (Decrease) increase in cash and short-term investments (918) 4,961 Balance, beginning of period 6,635 10,661 --------- --------- Balance, end of period $ 5,717 $ 15,622 ========= ========= Supplemental disclosures of cash flow information Cash paid during the period for: Interest $ 14,132 $ 15,980 ========= ========= Income taxes $ 4,622 $ 11,718 ========= =========
3 6 RAYONIER INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA) 1. EARNINGS PER COMMON SHARE The following table provides details of the calculation of basic and diluted EPS in accordance with Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share" for the three months and six months ended June 30, 1999 and 1998.
Three Months Six Months Ended June 30, Ended June 30, ----------------------------- ----------------------------- 1999 1998 1999 1998 ----------- ----------- ----------- ----------- Net Income $ 17,077 $ 18,440 $ 32,207 $ 36,636 =========== =========== =========== =========== Shares used for determining basic EPS 27,785,931 28,273,886 27,796,186 28,290,854 Dilutive effect of: Stock options 307,947 337,795 269,111 312,159 Contingent shares 240,000 231,084 240,000 231,084 ----------- ----------- ----------- ----------- Shares used for determining diluted EPS 28,333,878 28,842,765 28,305,297 28,834,097 =========== =========== =========== =========== Basic EPS $ 0.62 $ 0.65 $ 1.16 $ 1.29 =========== =========== =========== =========== Diluted EPS $ 0.60 $ 0.64 $ 1.14 $ 1.27 =========== =========== =========== ===========
4 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEGMENT INFORMATION Rayonier operates in two major business segments: Timber and Wood Products, and Specialty Pulp Products. The Timber and Wood Products segment includes two reportable business units: Forest Resources and Trading, and Wood Products. Chemical Cellulose, and Fluff and Specialty Paper Pulps are product lines within the Specialty Pulp Products segment. The amounts and relative contributions to sales and operating income attributable to each of Rayonier's reportable business units for the three months and six months ended June 30, 1999 and 1998 were as follows (thousands of dollars):
Three Months Six Months Ended June 30, Ended June 30, -------------------------- -------------------------- 1999 1998 1999 1998 --------- --------- --------- --------- SALES Timber and Wood Products Forest Resources and Trading $ 119,102 $ 99,645 $ 219,144 $ 184,074 Wood Products 32,786 32,276 57,414 61,483 --------- --------- --------- --------- Total Timber and Wood Products 151,888 131,921 276,558 245,557 --------- --------- --------- --------- Specialty Pulp Products Chemical Cellulose 69,945 75,786 132,785 143,531 Fluff and Specialty Paper Pulps 36,296 46,784 75,325 91,898 --------- --------- --------- --------- Total Specialty Pulp Products 106,241 122,570 208,110 235,429 --------- --------- --------- --------- Intersegment Eliminations (106) (480) (249) (1,561) --------- --------- --------- --------- Total Sales $ 258,023 $ 254,011 $ 484,419 $ 479,425 ========= ========= ========= ========= OPERATING INCOME Timber and Wood Products Forest Resources and Trading $ 29,892 $ 34,416 $ 58,409 $ 69,706 Wood Products 1,964 (3,576) 1,063 (9,230) --------- --------- --------- --------- Total Timber and Wood Products 31,856 30,840 59,472 60,476 Specialty Pulp Products 6,156 7,693 12,022 15,585 Corporate and Other (4,261) (3,361) (8,299) (6,732) --------- --------- --------- --------- Total Operating Income $ 33,751 $ 35,172 $ 63,195 $ 69,329 ========= ========= ========= =========
RESULTS OF OPERATIONS SALES AND OPERATING INCOME Sales for the second quarter of 1999 were $258 million, $4 million higher than the second quarter of 1998, while sales for the six months ended June 30, 1999 of $484 million were $5 million higher than the prior year. Sales increases in the Timber and Wood Products segment, principally due to higher trading activity, were partially offset by reduced sales in the Specialty Pulp Products segment due to lower pulp volume and chemical cellulose prices. Operating income for the second quarter of 1999 of $34 million was $1 million below prior year, while operating income for the six-month period ended June 30, 1999 of $63 million was $6 million below prior year. Forest Resources and Trading operating results for both periods decreased due to lower timber prices, land sales and Southeast U.S. timber volume. Specialty Pulp Products operating results for both periods declined due to decreased volume and chemical cellulose prices. However, improvements in Wood Products due to stronger lumber prices partially offset these decreases. 5 8 TIMBER AND WOOD PRODUCTS Timber and Wood Products sales for the second quarter were $152 million, $20 million higher than prior year resulting from higher trading activity and slightly improved Wood Products sales. Sales for the six month period were $277 million, $31 million higher than the prior year, reflecting higher trading activity partially offset by lower timber and wood products sales. Operating income for the three months ended June 30, 1999 of $32 million was $1 million above prior year. Year to date operating income of $59 million declined $1 million from last year as improved Wood Products results were offset by lower income from Forest Resources and Trading. FOREST RESOURCES AND TRADING Forest Resources and Trading sales for the three month period ended June 30, 1999 were $119 million, $19 million above prior year, resulting from growth of wood products trading activities and higher Northwest U.S. timber volume. These improvements were partially offset by lower Southeast U.S. timber prices and land sales. For the six month period ending June 30, 1999 sales were $219 million, $35 million above 1998 principally due to the higher wood products trading activity and improved log trading volume in Asian and U.S. domestic markets, partially offset by lower Southeast U.S. timber volume, timber prices and land sales. Operating income for the second quarter was $30 million, $5 million below 1998 resulting from lower Southeast U.S. timber prices and land sales partially offset by higher Northwest U.S. timber volume. Operating income for the first half of 1999 of $58 million was $11 million below prior year due to reduced timber prices in both the Northwest and Southeast U.S. and from lower land sales. Prices declined in the Northwest U.S. due to the impact of the Asian economic crisis on export products and in the Southeast U.S. due to reduced pulpwood demand resulting from pulp and paper mill closures and downtime in the region. Timber prices were unusually high in Southeast U.S. markets during the first half of 1998 due to unusually wet weather that led to restricted supply because of difficult logging conditions. WOOD PRODUCTS Wood Products sales for the second quarter ended June 30, 1999 were $33 million, relatively unchanged from the prior year, and for the six month period were $57 million, $4 million below 1998. Higher prices and volume for Southeast U.S. lumber, driven by continued strong U.S. housing demand, and improved markets for the Company's medium-density fiberboard (MDF) plant were offset by the absence of lumber sales from the Company's Plummer, ID mill which closed in July 1998 after the facility was damaged by fire. Operating income of $2 million and $1 million for the second quarter and first half of 1999, respectively, were $6 million and $10 million above prior year results. The improvement resulted from higher prices and lower operating costs for both lumber and MDF. SPECIALTY PULP PRODUCTS Sales of Specialty Pulp Products for the second quarter of 1999 were $106 million, $16 million below prior year due to lower volume and chemical cellulose prices. For the six month period, sales were $208 million, $27 million lower than 1998. The decline was primarily due to weaker demand for both fluff and chemical cellulose pulps and lower chemical cellulose pricing. Operating income of $6 million and $12 million for the second quarter and first half of 1999, respectively, were $2 million and $4 million below prior year. The decline resulted from lower fluff and chemical cellulose pulp volumes, lower chemical cellulose pricing and 45 days of market related shutdown costs for the Fernandina Beach, FL pulp mill, partially offset by lower wood and manufacturing costs. CORPORATE AND OTHER Corporate and other costs for the second quarter and six months to date of 1999 were above 1998 reflecting higher general and administrative expenses. OTHER INCOME / EXPENSE Interest expense of $15 million for the first six months of 1999 was $2 million below 1998 due to lower average interest rates and debt balances. Miscellaneous expense in the second quarter of 1999 included $0.5 million in costs associated with refinancing debt at lower interest rates. For the six months ended June 30, 1999 miscellaneous income was equal to last year, with the adverse impact of the debt refinancing expense offset by favorable first quarter interest income related to a contract settlement. 6 9 The effective tax rate of 33.3 percent for the first six months of 1999 compared to 30.7 percent in 1998. The 1998 rate is lower than the 1999 rate due to higher prior years' research and development tax credits, and tax benefits from foreign operations. NET INCOME Net income for the second quarter of 1999 was $17.1 million or $0.60 per Common Share, compared to $18.4 million, or $0.64 per Common Share in 1998. Net income for the six months ended June 30, 1999 was $32 million or $1.14 per share compared to $37 million or $1.27 per share last year. OTHER ITEMS The Company is optimistic about market conditions in the coming months based on a gradual improvement in Asian markets and a continued strong outlook for U.S. housing. Improvement is also expected to continue in MDF product and customer mix. Specialty Pulp earnings should strengthen due to higher fluff prices, although chemical cellulose market weakness remains. Despite normal second-half timber harvest reductions, the Company expects to largely sustain second quarter earnings levels in the third quarter. On July 29, 1999, the Company announced that it had signed a definitive agreement to purchase approximately 980,000 acres of timberland in Florida, Georgia and Alabama from Smurfit-Stone Container Corporation for $725 million. The transaction is expected to close early in the fourth quarter of 1999. The Company indicated that it will finance the acquisition with $225 million in cash and $500 million in pre-committed long-term notes to be issued by a wholly-owned Rayonier partnership that will hold all of the Company's U.S. timberlands. The Company expects to realize approximately $20 million per year in benefits by operating the timberlands similarly to its own management program by selling timber on an arms-length basis at auction and by eliminating overlapping marketing and management costs. At existing prices, the Company believes that the acquisition properties will contribute approximately $70 million annually to EBITDA (defined as earnings from continuing operations before significant non-recurring items, provision for dispositions, interest expense, income taxes and depreciation, depletion and amortization). Assuming an early fourth quarter closing, the after-tax earnings dilution in the fourth quarter is estimated at 18 cents per share. LIQUIDITY AND CAPITAL RESOURCES Cash flow from operating activities of $101 million for the first six months of 1999 increased $39 million from 1998 as a result of decreased working capital requirements. EBITDA for the first six months of 1999 of $114 million decreased $4 million from 1998 results primarily due to lower operating income at both Forest Resources and Trading, and Specialty Pulp Products. Cash from operating activities helped to finance capital expenditures of $44 million, dividends of $17 million and the repurchase of Common Shares for $6 million and also reduce debt by $38 million. In 1999, second quarter ending debt was $452 million and the debt-to-capital-ratio was 41.0 percent compared to debt of $490 million and a debt-to-capital-ratio of 43.4 percent at December 31, 1998. The Company repurchased 124,300 of its shares during the first six months of 1999 at an average price of $45.05 per share for a total cost of $5.6 million. Over the same period of 1998, the Company repurchased 190,294 shares, at an average cost of $45.77 per share for a total cost of $8.7 million. The Company has unsecured credit facilities totaling $300 million, which were used as support for $125 million of outstanding commercial paper. At June 30, 1999, the Company had $175 million available under its revolving credit facilities. In addition, the Company has on file with the Securities and Exchange Commission shelf registration statements to offer $150 million of new public debt securities. The Company believes that internally generated funds, combined with available external financing, will enable Rayonier to fund capital expenditures, share repurchases, working capital and other liquidity needs for the foreseeable future. YEAR 2000 COMPLIANCE Rayonier began its company-wide Year 2000 Project in 1996 and expects all phases to be completed by the end of the third quarter of 1999. The Project is designed to identify Year 2000 problems and take corrective action covering business and process control systems, networking communications, personal computer applications, embedded microprocessors and third party supplier and customer risks. The Company has engaged outside consultants to advise on, assist in and monitor compliance. The project team reports directly to the Company's senior executive officers and regularly provides program updates to the Audit Committee of the Board of Directors. As of June 30, 1999, the Company has identified potential Year 2000 problems with its internal systems (hardware, software, and process control devices) and completed most of the necessary corrective actions. Minor efforts remaining for full compliance will be completed in the third quarter of 1999. Outside advisors have assisted in planning and monitoring this effort. The evaluation 7 10 of external suppliers has been completed and contingency plans for critical suppliers that are not Year 2000 compliant are being developed. These contingency plans will also be completed before the end of the third quarter of 1999. The total amount expended on the Year 2000 Project through the first half of 1999 was approximately $3 million and the Company estimates that future costs could range up to $1 million. Many of the Company's systems were upgraded or replaced in the ordinary course of business during the last five years, and costs related to those upgrades and replacements are not included in the Year 2000 Project expenses. The Company believes that with the completion of its Year 2000 Project as scheduled, the risks will be minimized and the possibility of significant interruptions of operations reduced. However, if the Company and its third party suppliers and customers do not complete in a timely manner their assessment, remediation and testing for Year 2000 compliance, there can be no assurance that Year 2000 problems will not materially adversely affect the Company's results of operations or its relationships with its suppliers and customers. The Company has identified its hypercritical systems, the failure of which could constitute a worst case scenario, and is finalizing contingency plans to deal with any Year 2000 related failures. SAFE HARBOR Comments about market trends, anticipated earnings and future activities, including disclosures about the Company's Year 2000 project, are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Changes in factors referred to in such disclosures, and changes in the following additional important factors, among others, could cause actual results to differ materially from those expressed in the forward-looking statements: failure of one or more conditions to closing the acquisition of the Smurfit-Stone timberlands to be satisfied; failure to realize operational efficiencies; fluctuations in demand for specialty chemical cellulose and fluff pulps, export and domestic logs, and wood products; the impact of such market factors on the Company's timber sales in the U.S. and New Zealand; production costs for wood products and for specialty pulps, particularly for raw materials such as wood and chemicals; adverse weather conditions in the Company's operating areas; the possibility of forest fires; governmental policies and regulations affecting the environment, import and export controls, and taxes; and interest rate and currency movements. 8 11 ITEM 3. SELECTED OPERATING DATA
Three Months Six Months Ended June 30, Ended June 30, ---------------- ----------------- 1999 1998 1999 1998 ---- ---- ---- ---- TIMBER AND WOOD PRODUCTS Log trading sales volume North America, in millions of board feet 45 36 75 69 New Zealand, in thousands of cubic meters 319 225 591 376 Other, in thousands of cubic meters 162 51 272 89 Timber sales volume Northwest U.S., in millions of board feet 67 57 132 124 Southeast U.S., in thousands of short green tons 598 621 1,131 1,230 New Zealand, in thousands of cubic meters 321 244 591 370 Lumber sales volume, in millions of board feet 68 83(a) 124 157(a) Medium-density fiberboard sales volume, in thousands of cubic meters 31 24 58 37 Intercompany timber sales volume Northwest U.S., in millions of board feet 8 3 18 5 Southeast U.S., in thousands of short green tons 4 18 11 50 New Zealand, in thousands of cubic meters 148 94 269 154 SPECIALTY PULP PRODUCTS Pulp sales volume Chemical cellulose, in thousands of metric tons 81 86 155 163 Fluff and specialty paper pulp, in thousands of metric tons 69 89 146 175 Production as a percent of capacity 87.0% 98.7% 94.0% 98.6%
(a) Includes sales for the three months and six months ended June 30, 1998 of 20 and 37, respectively, by the Plummer, ID lumber mill, which closed in July 1998 after fire damaged the facility. 9 12 SELECTED SUPPLEMENTAL FINANCIAL DATA (thousands of dollars, except per share data)
Three Months Six Months Ended June 30, Ended June 30, ------------------------ ------------------------- 1999 1998 1999 1998 -------- -------- -------- --------- GEOGRAPHICAL DATA (NON-U.S.) Sales New Zealand $ 21,521 $ 16,545 $ 39,805 $ 27,611 Other 11,101 4,977 21,083 8,113 -------- -------- -------- --------- Total $ 32,622 $ 21,522 $ 60,888 $ 35,724 ======== ======== ======== ========= Operating Income New Zealand $ (1,068) $ (3,222) $ (2,703) $ (8,502) Other 38 (918) (268) (2,167) -------- -------- -------- --------- Total $ (1,030) $ (4,140) $ (2,971) $ (10,669) ======== ======== ======== ========= FOREST RESOURCES Sales Northwest U.S. $ 23,716 $ 20,589 $ 47,582 $ 47,423 Southeast U.S. 14,754 23,555 31,696 45,135 New Zealand 7,430 5,878 12,792 9,334 -------- -------- -------- --------- Total $ 45,900 $ 50,022 $ 92,070 $ 101,892 ======== ======== ======== ========= Operating Income Northwest U.S. $ 18,704 $ 14,493 $ 37,270 $ 35,475 Southeast U.S. 10,532 17,965 22,995 34,342 New Zealand 2,467 2,446 3,465 3,101 -------- -------- -------- --------- Total $ 31,703 $ 34,904 $ 63,730 $ 72,918 ======== ======== ======== ========= EBITDA per Share Northwest U.S. $ 0.70 $ 0.55 $ 1.39 $ 1.30 Southeast U.S. 0.46 0.73 0.99 1.37 New Zealand 0.21 0.18 0.35 0.26 -------- -------- -------- --------- Total $ 1.37 $ 1.46 $ 2.73 $ 2.93 ======== ======== ======== =========
10 13 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Rayonier's 10-K for 1998 reported that the U.S. Court of Appeals for the Eleventh Circuit on March 10, 1999 affirmed summary judgment in favor of Rayonier in an action brought by Powell-Duffryn Terminals. Subsequently, on March 31, 1999, Powell-Duffryn filed a motion for rehearing by the same court. This motion was denied on May 11, 1999. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Shareholders of the Company was held on May 21, 1999. At that meeting, three directors were elected as follows (there were no broker non-votes with respect to the election of directors):
Votes For Votes Withheld --------- -------------- Director of Class II, Term Expires in 2002: Paul G. Kirk, Jr 23,112,469 111,779 Carl S. Sloane 23,115,384 108,864 Gordon I. Ulmer 23,112,476 111,772
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) See Exhibit Index. (b) Rayonier Inc. filed a current report on Form 8-K on July 29, 1999, including a press release issued on that date. SIGNATURE Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RAYONIER INC. (Registrant) --------------------------- BY GEORGE C. KAY -------------- George C. Kay Vice President and Corporate Controller August 13, 1999 (Chief Accounting Officer) 11 14 EXHIBIT INDEX EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION LOCATION ----------- ----------- -------- 2 Plan of acquisition, reorganization, None arrangement, liquidation or succession 3.1 Amended and restated articles of incorporation No amendments 3.2 By-laws No amendments 4 Instruments defining the rights of security holders, Not required to be filed. The including indentures Registrant hereby agrees to file with the Commission a copy of any instrument defining the rights of holders of the Registrant's long-term debt upon request of the Commission. 10 Material Contracts None 11 Statement re computation of per share earnings Not required to be filed 12 Statement re computation of ratios Filed herewith 15 Letter re unaudited interim financial information None 18 Letter re change in accounting principles None 19 Report furnished to security holders None 22 Published report regarding matters None submitted to vote of security holders 23 Consents of experts and counsel None 24 Power of attorney None 27 Financial data schedule Filed herewith 99 Additional exhibits None
12 EX-12 2 RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12 RAYONIER INC. AND SUBSIDIARIES RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED) (THOUSANDS OF DOLLARS)
Six Months Ended June 30, -------------------------- 1999 1998 ------- ------- Earnings: Net Income $32,207 $36,636 Add: Income Taxes 16,082 16,206 Amortization of Capitalized Interest 1,184 1,122 ------- ------- Additions to Net Income 17,266 17,328 ------- ------- Adjustments to Earnings for Fixed Charges: Interest and Other Financial Charges 15,387 16,984 Interest Factor Attributable to Rentals 875 987 ------- ------- Adjustments for Fixed Charges 16,262 17,971 ------- ------- EARNINGS AS ADJUSTED $65,735 $71,935 ======= ======= Fixed Charges: Fixed Charges above $16,262 $17,971 Capitalized Interest 150 194 ------- ------- TOTAL FIXED CHARGES $16,412 $18,165 ======= ======= RATIO OF EARNINGS AS ADJUSTED TO TOTAL FIXED CHARGES 4.01 3.96 ======= =======
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1999 JAN-01-1999 JUN-30-1999 5,717 0 113,195 4,863 107,890 280,573 1,327,668 646,723 1,588,857 184,336 446,404 0 0 76,958 574,361 1,588,857 484,419 484,419 403,879 403,879 16,864 0 15,387 48,289 16,082 32,207 0 0 0 32,207 1.16 1.14
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