<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
September 30, 1995
------------------
Commission File Number 0-3730
Willamette Industries, Inc.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
State of Oregon 93-0312940
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3800 First Interstate Tower, Portland, Oregon 97201
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (503) 227-5581
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
--- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, 50 cent par value: 55,273,706, October 30, 1995.
-----------------------------
<PAGE>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q
CONSOLIDATED BALANCE SHEETS PART I
(dollar amounts, except per share amounts, in thousands) ITEM 1
<TABLE>
<CAPTION>
<S> <C> <C> <C>
September 30, December 31,
ASSETS 1995 1994
--------- ---------
Current assets:
Cash $ 14,022 12,798
Receivables, net of allowance
for doubtful accounts of $5,198 and $5,278 373,940 283,055
Inventories (Note 2) 369,194 256,091
Prepaid expenses and deposits on timber cutting contracts 49,477 52,710
---------- ---------
Total current assets 806,633 604,654
Timber, timberlands and related facilities, net 508,060 509,075
Property, plant and equipment, at cost less
accumulated depreciation of $1,441,196 and $1,301,882 1,999,536 1,863,505
Other assets 64,285 56,164
---------- ---------
Total assets $ 3,378,514 3,033,398
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,783 50,956
Notes payable 40,000 100,000
Accounts payable, including book overdrafts
of $52,618 and $48,589 163,587 173,549
Accrued expenses 144,514 118,667
Accrued income taxes 40,453 22,954
---------- ---------
Total current liabilities 390,337 466,126
Deferred income taxes 304,197 231,717
Other liabilities 32,979 31,893
Long-term debt 915,630 915,797
Stockholders' equity:
Common stock, $.50 par value. Authorized 75,000,000
shares; issued 55,270,714 and 55,036,191 shares. 27,635 27,518
Capital surplus 303,304 293,756
Retained earnings 1,404,432 1,066,591
---------- ---------
Total stockholders' equity 1,735,371 1,387,865
---------- ---------
Total liabilities & stockholders' equity $ 3,378,514 3,033,398
========== =========
</TABLE>
<PAGE>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q
CONSOLIDATED STATEMENTS OF EARNINGS PART I
(dollar amounts, except per share amounts, in thousands) ITEM 1
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 1,019,420 780,827 2,923,605 2,189,229
Cost of sales 707,464 647,902 2,092,831 1,829,786
---------- --------- --------- ---------
Gross profit 311,956 132,925 830,774 359,443
Selling and administrative expenses 49,052 47,090 150,533 137,276
---------- --------- --------- ---------
Operating earnings 262,904 85,835 680,241 222,167
Other income (expense), net (2) (5,522) 387 (6,076)
---------- --------- --------- ---------
262,902 80,313 680,628 216,091
Interest expense, net 17,853 18,980 56,018 52,945
---------- --------- --------- ---------
Earnings before taxes 245,049 61,333 624,610 163,146
Provision for income taxes 94,344 23,613 240,475 62,811
---------- --------- --------- ---------
Net earnings $ 150,705 37,720 384,135 100,335
========== ========== ========== ==========
Weighted average number of
shares outstanding 55,210,587 55,029,110 55,107,119 55,013,498
========== ========== ========== ==========
Per share information:
Net earnings $ 2.73 0.68 6.97 1.82
========== ========== ========== ==========
Dividends $ 0.30 0.24 0.84 0.72
========== ========== ========== =========
</TABLE>
<PAGE>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q
CONSOLIDATED STATEMENTS OF CASH FLOWS PART I
(dollar amounts in thousands) ITEM 1
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1995 1994
---------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 384,135 100,335
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 160,495 141,261
Cost of fee timber harvested 18,645 14,167
Other amortization 4,631 3,656
Increase in deferred income taxes 72,480 18,064
Changes in working capital items:
Accounts receivable (90,885) (91,011)
Inventories (113,103) 11,756
Prepaid expenses and deposits on timber
cutting contracts 3,233 (1,558)
Accounts payable and accrued expenses 15,885 21,702
Accrued income taxes 17,499 (5,725)
--------- --------
Net cash provided by operating activities 473,015 212,647
--------- --------
Cash flows from investing activities:
Proceeds from sale of equipment 572 2,023
Expenditures for property, plant and equipment (297,127) (239,664)
Expenditures for timber and timberlands, net (16,582) (18,851)
Expenditures for roads and reforestation (5,547) (5,781)
Other (6,994) 6,312
--------- --------
Net cash used in investing activities (325,678) (255,961)
--------- --------
Cash flows from financing activities:
Debt borrowing 76,134 77,000
Proceeds from sale of capital stock 9,521 4,908
Cash dividends (46,294) (39,602)
Payment on debt (185,474) (678)
--------- --------
Net cash used by financing activities (146,113) 41,628
--------- --------
Net change in cash 1,224 (1,686)
Cash at beginning of period 12,798 9,543
--------- --------
Cash at end of period $ 14,022 7,857
========= ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) $ 55,797 52,356
========= ========
Income taxes $ 150,496 50,472
========= ========
</TABLE>
<PAGE>
PART I
ITEM 1
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995
Note 1 The information furnished in this report reflects all adjustments
which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods presented.
Note 2 The components of inventories are as follows (thousands of
dollars):
September 30, December 31,
1995 1994
--------- --------
Finished product $ 91,416 72,229
Work in process 6,575 6,794
Raw material 198,628 114,596
Supplies 72,575 62,472
--------- --------
$ 369,194 256,091
========= ========
Other notes have been omitted pursuant to Rule 10-01(a)(5) of
Regulation S-X.
<PAGE>
FORM 10-Q
PART I
ITEM 2
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
September 30, 1995
The Company's two basic businesses, paper products and building materials, are
affected by changes in general economic conditions. Paper product sales and
earnings tend to follow the general economy. Building materials activity is
closely related to new housing starts and to the availability and terms of
financing for construction. Both industry segments use timber as their basic
raw material. The cost of timber is sensitive to various supply and demand
factors including environmental issues affecting log supply.
RESULTS OF OPERATIONS
---------------------
3rd Quarter 1995 vs. 3rd Quarter 1994
-------------------------------------
Net sales increased 30.6% in the third quarter of 1995 compared with the third
quarter of 1994. Paper product sales increased 55.6%. Except for grocery bag
and corrugated container shipments, unit sales volumes exceeded levels from
the same period a year ago. Grocery bag shipments, due to the resistance of
higher prices and the alternative use of plastics, and corrugated container
shipments, due mainly to exceptionally strong demand in the third quarter of
1994, were 18.6% and 6.3% respectively below levels from the same period in
1994. Selling prices in all paper product lines exceeded levels from the
third quarter of 1994 by 31.0% or more. However, as the third quarter of 1995
ended, additional capacity, a softening export market and industry downtime
for inventory adjustment have subjected the brown paper markets to pricing
pressures. Building materials sales decreased 11.4% compared with the third
quarter of 1994 mainly due to a decline in unit shipments for all building
materials product lines. Unit shipments declined primarily due to longer
normal scheduled vacation shutdowns in the third quarter of 1995 compared with
the third quarter of 1994 and because of the closure of the Sweet Home, Oregon
plywood plant in the fourth quarter of 1994. Except for plywood, selling
prices in all other building
materials product lines declined in the third quarter of 1995 compared with
the third quarter of 1994. The price decline was mostly due to exceptionally
strong price realizations in the third quarter of 1994.
Gross profit margins increased to 30.6% in the third quarter of 1995 from
17.0% in the third quarter of 1994. Paper product gross margins increased to
33.9% from 11.9% in the third quarter of 1994 as average sales prices
increased in all paper product lines by 31.0% or more. Unit shipments of
bleached paper products also increased significantly in the third quarter of
1995 compared with levels from the same period a year ago aiding in the
improvement of paper product gross margins. The gain in paper product gross
margins realized due to sales improvements was partially offset by more than
usual downtime taken at some of the Company's paper mills. Maintenance days
totaled 14 in the third quarter of 1995 compared with 4 days in the third
quarter of 1994. Building materials gross margins declined to 22.1% compared
with 25.6% in the third quarter of 1994. The decrease in building materials
gross margins is mainly due to lower selling prices in all building materials
product lines except plywood, lower unit shipments and higher log costs. The
cost of logs in the third quarter of 1995 increased 6.8% over levels from the
third quarter of 1994. Log costs increased primarily due to higher open
market log prices in the Company's southern operating regions.
Other income(expense), net, was $(.2) million in the third quarter of 1995
versus $(5.5) million for the same period a year ago mainly due to the August,
1994 announcement of the closure of the Sweet Home, Oregon plywood plant which
occurred in the fourth quarter of 1994.
Interest expense was $17.9 million in the third quarter of 1995 compared with
$19.0 million in the third quarter of 1994. The Company's average outstanding
debt decreased $122.2 million between the two periods which was the main
reason for the decline in interest expense between the periods. The Company's
effective interest rate on average outstanding debt was 7.79% in the third
quarter of 1995 compared with 7.46% for the third quarter of 1994.
Nine Months ended September 30, 1995 vs.
----------------------------------------
Nine Months ended September 30, 1994
------------------------------------
Net sales increased 33.5% in the first nine months of 1995 from the comparable
period of 1994. Paper product sales increased 56.2%. In the first nine
months of 1995, selling prices increased by 34.6% or more in all paper product
lines. Except for grocery bags and corrugated containers shipments, unit
sales volumes increased by 10.4% or more in all other paper product lines.
Grocery bag and corrugated container shipments were 11.8% and 1.5%
respectively below levels from the first nine months of 1994 mainly due to
exceptionally strong demand for these products during the first three quarters
of 1994. Building materials sales decreased 2.8% in the nine months ended
September 30, 1995 mostly due to lower unit shipments in all building
materials product lines. Unit sales volumes declined 2.1% or more in all
building materials product lines in the first nine months of 1995. Unit
shipments declined primarily due to longer than normal scheduled vacation
shutdowns in the third quarter of 1995 compared with the third quarter of 1994
and because of the closure of the Sweet Home, Oregon plywood plant in the
fourth quarter of 1994. Except for lumber, selling prices in all other
building materials product lines were higher in the first nine months of 1995
when compared with those realized in the first nine months of 1994. These
higher selling prices partially offset the decline in building materials sales
due to lower unit shipments.
The gross profit margin was 28.4% for the nine months ended September 30, 1995
compared to 16.4% for the comparable period in 1994. Paper product gross
margins increased to 30.6% for the first nine months of 1995 compared with
10.9% for the nine months ended September 30, 1994 reflecting improved selling
prices for all paper product lines and improved unit sales volumes in all
bleached paper product lines. Paper product gross margins also improved due
to recognizing start-up costs in the first nine months of 1994 for the
installation of a new pulping facility and paper machine at the Company's
Johnsonburg, Pennsylvania mill. Partially offsetting the increase in gross
margins was the escalation of old corrugated container (OCC) prices. OCC is a
raw material used in the manufacture of unbleached paper and prices for OCC in
the first nine months of 1995 increased 76.2% compared with the same period in
1994. Building materials gross profit margins decreased to 23.2% compared
with 25.3% in the first nine months of 1994. The drop in building materials
margins is mainly due to decreases in unit shipments coupled with higher log
costs and increased glue and resin costs. Log costs in the first nine months
of 1995 increased 7.8% over costs for the same period a year ago. The cost of
glue and resin, raw materials used in the manufacture of plywood and composite
board products, increased $13.7 million or 31.0% in the first nine months of
1995 over costs from the same period a year ago. The increase in cost of
these raw materials exacerbated the decline in building materials gross
margins due to lower unit shipments.
Selling and administrative expenses declined to 5.1% of net sales in the first
nine months of 1995 compared with 6.3% for the same period in 1994. The drop
was due to higher net sales as selling and administrative expenses increased
9.7% between the two periods mainly due to expansion of the Company's
operations.
Other income(expense), net, was $0.4 million in the first nine months of 1995
versus $(6.1) million for the same period a year ago. The greater expense in
1994 was mainly due to the closure of the Sweet Home, Oregon plywood plant. A
charge of $5 million was recorded as other income(expense), net, in the third
quarter of 1994 when the closure was announced.
Interest expense was $56.0 million in the first nine months of 1995 compared
to $52.9 million in the first nine months of 1994. Capitalized interest
declined to $4.0 million in 1995 versus $6.8 million in 1994 which accounted
for most of the increase in net interest expense between the periods.
Although the Company's average outstanding debt decreased $71.3 million
between the two periods, gross interest was $60.0 million in 1995 versus $59.8
million in 1994 as the Company experienced an overall increase in effective
interest rates. The Company's effective interest rate on average outstanding
debt increased from 7.35% in the first nine months of 1994 to 7.90% for the
same period in 1995.
Financial Condition as of September 30, 1995
--------------------------------------------
During the first nine months of 1995, the Company had capital expenditures of
$319.3 million that were funded by internally generated cash flows. Cash
flows from operating activities increased $260.4 million or 22.4% in the first
nine months of 1995 from the comparable period in 1994 mainly due to increased
operating earnings and higher non-cash charges against earnings. In addition
to completely funding capital expenditures for the first nine months of 1995,
higher operating cash flows have allowed the Company to reduce its net debt
outstanding by $109.3 million. Significant debt transactions since December
31, 1994 include the retirement of a $100.0 million long-term note with a
9.55% interest rate that was due in April of 1995 and additional borrowing of
$50.0 million in May of 1995 under an agreement arranged with a bank at market
interest rates. The proceeds of the $50.0 million bank borrowing were used in
conjunction with the acquisition of the Kingsport, Tennessee paper mill from
The Mead Corporation and for working capital needs.
The total debt to capital ratio has decreased to 35.6% at September 30, 1995
from 43.5% at December 31, 1994. Net working capital increased to $416.3
million at September 30, 1995 from $138.5 million at December 31, 1994. The
change in net working capital is primarily due to increases in inventories and
receivables coupled with a reduction in short-term debt. Inventories have
increased $113.1 million mainly due to the following factors: inventory
quantities were unusually low at December 31, 1994, inventory was acquired in
conjunction with the purchase of the Kingsport, Tennessee paper mill and
generally higher prices for the Company's non-manufactured inventories not
accounted for on a LIFO basis. Receivables have increased $90.9 million from
December 31, 1994 mostly due to higher sales.
The Company believes it has the resources available to meet its liquidity
requirements. Resources include internally generated funds, short-term
borrowing agreements, revolving credit lines and term loans which could be
arranged with several banks as the Company has done in the past. In April of
1994, the Company registered under the Securities Act of 1933, senior debt
securities totaling $200.0 million. As of the date of this filing, none of
the debt securities have been issued.
The Board of Directors of the Company voted to pay a quarterly cash dividend
of $.30 per share in the third quarter of 1995 which represented a 11.1%
increase over the dividend from the preceding quarter; however, there is no
assurance to future dividends as they are dependent upon earnings, capital
requirements and financial condition. Also, in August of 1995, The Board of
Directors of the Company authorized the repurchase of up to $100.0 million of
the Company's common stock. As of September 30, 1995, the Company had not
repurchased any of its common stock.
<PAGE>
Item 5. Other Information
- -------------------------
William Swindells retired as the Company's chief executive officer
on September 30, 1995 and will remain chairman of the board. Steven R. Rogel
was named to replace him as the Company's chief executive officer. Rogel has
been president and chief operating officer of the Company since 1991 and
joined the Company in 1972. Rogel is 53 years old.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
Exhibit No. Exhibit
----------- -------
3.B Bylaws of the registrant
as amended through October 1, 1995.
12 Computation of
Ratio of Earnings
to Fixed Charges.
27 Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
None
SIGNATURE
Pursuant to the requirements 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.
WILLAMETTE INDUSTRIES, INC.
By /s/J. A. Parsons
J. A. Parsons
Executive Vice President
Principal Financial Officer)
Date: October 30, 1995
<PAGE>
<PAGE>
Exhibit 3.B
BYLAWS
OF
WILLAMETTE INDUSTRIES, INC.
AS AMENDED THROUGH
October 1, 1995
ARTICLE I
Offices
Section 1. Principal Office. The principal office of the
corporation in the State of Oregon shall be located in the City of Portland,
County of Multnomah. The corporation may have such other offices, either
within or without the State of Oregon, as the board of directors may designate
or as the business of the corporation may require from time to time.
Section 2. Registered Office. The registered office of the
corporation required by the Oregon Business Corporation Act ("Act") to be
maintained in the State of Oregon may be, but need not be, the same as any of
its places of business in the State of Oregon, and the location of the
registered office may be changed from time to time by the board of directors
or the registered agent of the corporation.
ARTICLE II
Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders
shall be held on the fourth Thursday in April at 10 a.m., for the purpose of
electing directors and for the transaction of such other business as may come
before the meeting.
Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, may be called by the chairman of
the board, by the president and chief executive officer or by the board of
directors, and shall be called by the chairman of the board if one or more
written demands for a meeting describing the purpose or purposes for which it
is to be held are signed, dated and delivered to the secretary of the
corporation by the holders of at least 10 percent of all votes entitled to be
cast on any issue proposed to be considered at the meeting.
Section 3. Place of Meeting. The board of directors shall
determine the place of meeting for all annual and special meetings of the
shareholders. In the absence of any such determination, all meetings of
shareholders shall be held at the principal office of the corporation in the
State of Oregon.
Section 4. Notice of Meeting. Written or printed notice stating
the place, day and hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be given not
earlier than 60 nor less than ten days before the date of the meeting, either
personally or by mail, by or at the direction of the chairman of the board,
the president and chief executive officer or the secretary, or the persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be effective when deposited in the
United States mail, addressed to the shareholder at his address as shown in
the corporation's current record of shareholders, with postage thereon
prepaid. If a meeting is adjourned to a different date, time or place
announced at the meeting before adjournment, notice need not be given of the
new date, time or place unless a new record date is or must be fixed for the
adjourned meeting.
Section 5. Quorum; Manner of Acting. Shares entitled to vote as a
separate voting group may take action on a matter only if a quorum of those
shares exists with respect to the matter. A majority of the votes entitled to
be cast on the matter by voting group, represented in person or by proxy,
shall constitute a quorum of that voting group for action on that matter. If
a quorum exists, action on a matter, other than the election of directors,
shall be approved by a voting group if the votes cast within the voting group
favoring the action exceed the votes cast opposing the action unless the Act
requires a greater number of affirmative votes. Directors shall be elected by
a plurality of the votes cast by the shares entitled to vote in the election
at a meeting at which a quorum is present. Once a share is represented for
any purpose at a meeting, it shall be deemed present for quorum purposes for
the remainder of the meeting and for any adjournment of the meeting unless a
new record date is or must be set for the adjourned meeting.
Section 6. Proxies. At all meetings of shareholders, a
shareholder may vote by proxy executed in writing by the shareholder or by his
duly authorized attorney-in-fact. Such proxy shall be filed with the
secretary of the corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
Section 7. Voting of Shares. Each outstanding share of the
corporation's common stock shall be entitled to one vote upon each matter
submitted to a vote at a meeting of the shareholders except that shares owned,
directly or indirectly, by another corporation in which the corporation owns,
directly or indirectly, a majority of the shares entitled to vote for the
election of directors of such other corporation shall not be voted at any
meeting or counted in determining the total number of outstanding shares at
any given time.
Section 8. Acceptance of Votes. If the name signed on a vote,
consent, waiver or proxy appointment corresponds to the name of a shareholder,
the corporation shall be entitled to accept the vote, consent, waiver or proxy
appointment and give it effect as the act of the shareholder.
If the name signed on a vote, consent, waiver or proxy appointment
does not correspond to the name of its shareholder, the corporation shall
nevertheless be entitled to accept the vote, consent, waiver or proxy
appointment and give it effect as the act of the shareholder if:
a. The shareholder is an entity and the name signed purports
to be that of an officer or agent of the entity.
b. The name signed purports to be that of an administrator,
executor, guardian or conservator representing the shareholder.
c. The name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder.
d. The name signed purports to be that of a pledgee,
beneficial owner or attorney-in-fact of the shareholder.
e. Two or more persons are the shareholder as cotenants or
fiduciaries, the name signed purports to be the name of at least one
of the co-owners, and the person signing appears to be acting on
behalf of all co-owners.
The corporation shall be entitled to reject a vote, consent, waiver
or proxy if the secretary or other officer of agent authorized to tabulate
votes, acting in good faith, has reasonable basis for doubt about the validity
of the signature on it or about the signatory's authority to sign for the
shareholder.
ARTICLE III
Board of Directors
Section 1. General Powers. The business and affairs of the
corporation shall be managed by its board of directors.
Section 2. Number, Tenure and Classification. The number of
directors shall be eleven, divided into three classes, three directors to be
designated as Class A directors, four directors to be designated as Class B
directors and four directors to be designated as Class C directors. At each
annual meeting, directors to replace those whose terms expire at such annual
meeting shall be elected, each such director to hold office until the third
annual meeting next succeeding his election and until his successor is elected
or until his death, resignation, retirement or removal.
Section 3. Regular Meetings. A regular meeting of the board of
directors shall be held without other notice than this bylaw immediately
after, and at the same place as, the annual meeting of shareholders. The
board of directors may provide by resolution the time and place, either within
or without the State of Oregon, for the holding of additional regular meetings
without other notice than such resolution.
Section 4. Special Meetings. Special meetings of the board of
directors may be called by or at the request of the chairman of the board or
any two directors. The person or persons authorized to call special meetings
of the board of directors may fix any place, either within or without the
State of Oregon, as the place for holding any special meeting of the board of
directors called by them.
Section 5. Notice; Waiver. Notice of the time, date and place of
any special meeting shall be given at least ten days previously thereto,
orally or by written notice delivered personally or given by telegraph,
teletype or other form of wire communication, or by mail or private carrier,
to each director at his business address. Oral notice shall be effective when
communicated if communicated in a comprehensible manner and written notice
shall be effective at the earliest of the following: (a) when received,
(b) five days after its deposit in the United States mail, as evidenced by the
postmark, if mailed postpaid and correctly addressed, and (c) on the date
shown on the return receipt, if sent by registered or certified mail, return
receipt requested, and the receipt is signed by or on behalf of the director.
A director's attendance at, or participation in, a meeting shall constitute a
waiver of notice of such meeting, except where a director at the beginning of
the meeting, or promptly upon the director's arrival, objects to holding of
the meeting or the transacting of business at the meeting and does not
thereafter vote for or assent to action taken at the meeting. A written
waiver of notice of a meeting signed by the director or directors entitled to
such notice, whether before or after the time stated therein, which specifies
the meeting for which notice is waived and which is filed with the minutes or
corporate records shall be equivalent to the giving of such notice. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting.
Section 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the board of directors, but, if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 7. Manner of Acting. The affirmative vote of a majority
of the directors present at a meeting at which a quorum is present shall be
the act of the board of directors.
Section 8. Vacancies. Any vacancy occurring in the board of
directors, including a vacancy resulting from an increase in the number of
directors, may be filled by the board of directors or, if the remaining
directors constitute fewer than a quorum, by the affirmative vote of a
majority of all the remaining directors. The term of a director elected to
fill a vacancy shall expire at the next shareholders' meeting at which
directors are elected.
Section 9. Presumption of Assent. A director who is present at a
meeting of the board of directors at which corporate action is taken shall be
deemed to have assented to the action taken, unless (a) the director objects
at the beginning of the meeting, or promptly upon the director's arrival, to
holding the meeting or transacting business at the meeting; (b) the director's
dissent or abstention from the action taken is entered in the minutes of the
meeting; or (c) the director delivers written notice of dissent or abstention
to the presiding officer of the meeting before its adjournment or to the
corporation immediately after adjournment of the meeting. Such right to
dissent or abstain shall not apply to a director who voted in favor of such
action.
Section 10. Removal of Directors. All or any number of the
directors of the corporation may be removed, with or without cause, at a
meeting called expressly for that purpose, by the affirmative vote of the
holders of not less than 80 percent of the outstanding shares of capital stock
of the corporation.
Section 11. Compensation. By resolution of the board of
directors, each director may be paid an annual fee as director and, in
addition thereto, a fixed sum for attendance at each meeting of the board of
directors and executive committee or other committees and his expenses, if
any, of attendance at any such meeting. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor.
Section 12. Retirement. Each director shall retire from the board
of directors on the date of the regular quarterly meeting of directors next
following the date on which he attains the age of 72 and shall not be eligible
thereafter for reelection.
Section 13. Emeritus Director. The board of directors may elect
one or more emeritus directors to serve at the pleasure of the board of
directors. Persons eligible to serve as emeritus directors shall be former
directors of this corporation or of a predecessor corporation; an emeritus
director shall be entitled to attend meetings of the board of directors but
shall not be entitled to vote on any matter submitted to the board of
directors. The board of directors shall fix the compensation to be paid each
emeritus director. Notice of any meeting of the board of directors need not
be given to an emeritus director, and he shall not be counted for a quorum of
the board of directors.
Section 14. Action Without a Meeting. Any action that may be
taken by the board of directors at a meeting may be taken without a meeting if
one or more consents in writing describing the action so taken shall be signed
by all the directors and included in the minutes or filed with the corporate
records reflecting the action taken.
Section 15. Telephonic Meetings. Meetings of the board of
directors, or of any committee designated by the board of directors, may be
held by means of conference telephone or any other means of communication by
which all directors participating in the meeting can hear each other
simultaneously during the meeting, and such participation shall constitute
presence in person at the meeting.
Section 16. Notification of Nominations. Nominations for the
election of directors may be made by the board of directors or a proxy
committee appointed by the board of directors or by any shareholder entitled
to vote in the election of directors generally. However, any shareholder
entitled to vote in the election of directors generally may nominate one or
more persons for election as directors at a meeting only if written notice of
such shareholder's intent to make such nomination or nominations has been
given, either by personal delivery or by United States mail, postage prepaid,
to the secretary of the corporation not later than (i) with respect to an
election to be held at an annual meeting of shareholders, 90 days in advance
of such meeting, and (ii) with respect to an election to be held at a special
meeting of shareholders for the election of directors, the close of business
on the seventh day following the date on which notice of such meeting is first
given to shareholders. Each such notice shall set forth: (a) the name and
address of the shareholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the shareholder
is a holder of record of stock of the corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the shareholder; (d) such
other information regarding each nominee proposed by such shareholder as would
be required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission, had the nominee been
nominated, or intended to be nominated, by the board of directors; and (e) the
consent of each nominee to serve as a director of the corporation if so
elected. The chairman of the meeting may refuse to acknowledge the nomination
of any person not made in compliance with the foregoing procedure.
ARTICLE IV
Executive Committee
and Other Committees
Section 1. Appointment. The board of directors by resolution
adopted by a majority of the full board may appoint an executive committee to
consist of a chairman and two or more other directors. The chairman of the
committee shall be a director and shall be selected by the board of directors
from the members of the executive committee. The designation of such
committee and the delegation thereto of authority shall not operate to relieve
the board of directors, or any member thereof, of any responsibility imposed
by law.
Section 2. Authority. The executive committee, when the board of
directors is not in session, shall have and may exercise all the authority of
the board of directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee and except
also that neither the executive committee nor any other committee of the board
of directors appointed pursuant to Section 10 of this Article IV shall have
the authority to (a) authorize distributions; (b) approve or propose to
shareholders actions required by the Act to be approved by shareholders;
(c) fill vacancies on the board of directors or any of its committees;
(d) amend articles of incorporation; (e) adopt, amend or repeal bylaws;
(f) approve a plan of merger not requiring shareholder approval; (g) authorize
or approve reacquisition of shares, except according to a formula or method
prescribed by the board of directors; or (h) authorize or approve the issuance
or sale or contract for sale of shares, or determine the designation and
relative rights, preferences and limitations of a class or series of shares,
except that the board of directors may authorize a committee or a senior
executive officer of the corporation to do so within limits specifically
prescribed by the board of directors.
Section 3. Tenure and Qualifications. Each member of the
executive committee shall hold office until the next regular annual meeting of
the board of directors following his appointment and until his successor is
appointed as a member of the executive committee.
Section 4. Meetings; Notice; Waiver. Regular meetings of the
executive committee or any other committee of the board of directors appointed
pursuant to Section 10 of this Article IV may be held without notice at such
times and places as the committee may fix from time to time by resolution.
Special meetings of the executive committee or any such other committee may be
called by any member thereof upon not less than two days' notice stating the
place, date and hour of the meeting. The provisions of Section 5 of
Article III shall apply to the method for giving of notice of special meetings
of the executive committee or any such other committee and to the waiver of
notice of any such meetings. The notice of a meeting of the executive
committee or any such other committee need not state the business proposed to
be transacted at the meeting.
Section 5. Quorum; Manner of Acting. A majority of the members of
the executive committee or any such other committee shall constitute a quorum
for the transaction of business at any meeting thereof, and the act of a
majority of the members present at a meeting at which a quorum is present
shall be the act of the committee.
Section 6. Action Without a Meeting. Any action that may be taken
by the executive committee or any such other committee at a meeting may be
taken without a meeting if one or more consents in writing describing the
action so taken shall be signed by all the members of the committee and
included in the minutes of the committee or filed with the corporate records
reflecting the action so taken.
Section 7. Vacancies. Any vacancy in the executive committee or
any such other committee may be filled by a resolution adopted by a majority
of the full board of directors.
Section 8. Resignations and Removal. Any member of the executive
committee or any such other committee may be removed at any time with or
without cause by resolution adopted by a majority of the full board of
directors. Any member of the executive committee or any such other committee
may resign as a member of the committee at any time by giving written notice
to the chairman of the board or secretary of the corporation, and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 9. Procedure. The chairman of the executive committee
shall be the presiding officer of the executive committee. The executive
committee and any such other committee shall fix its own rules of procedure
which shall not be inconsistent with these bylaws. The committee shall keep
regular minutes of its proceedings and report the same to the board of
directors for its information at the meeting thereof held next after the
proceedings shall have been taken.
Section 10. Appointment of Other Committees of the Board of
Directors. The board of directors may from time to time by resolution adopted
by a majority of the full board, create any other committee or committees of
the board of directors and appoint members of the board to serve thereon.
Each such committee shall have two or more members and, to the extent
specified by the board of directors, may exercise the powers of the board
subject to the limitations set forth in Section 2 of this Article IV.
Section 11. Appointment of Other Committees. The board of
directors or the executive committee or, pursuant to the authority of the
board of directors or the executive committee, the chairman of the board may
from time to time create and appoint any other committee or committees, or
subcommittee or subcommittees, whether composed of directors, officers or
employees, with such duties, responsibilities and authority as may be
prescribed by the board of directors or the executive committee, or by the
chairman of the board pursuant to the authority of the board of directors or
of the executive committee.
Each such committee or subcommittee shall fix its own rules of
procedure. The board of directors, the executive committee or the chairman of
the board with respect to any such committee or subcommittee created and
appointed by him shall have power to change the members of any such committee
or subcommittee at any time, to fill vacancies and to dissolve any such
committee or subcommittee at any time. Any committee may appoint one or more
subcommittees, of its own members, to advise with such committee, or to
apportion the work of such committee.
ARTICLE V
Officers
Section 1. Number. The officers of the corporation shall be a
chairman of the board, a president and chief executive officer, one or more
executive vice-presidents and vice-presidents (the number of executive vice-
presidents and vice-presidents to be determined by the board of directors), a
chief financial officer, a secretary and a treasurer, each of whom shall be
appointed by the board of directors. The board of directors may from time to
time appoint such assistant officers as may be deemed necessary or desirable
for the business of the corporation. Such assistant officers shall have such
duties as may be prescribed by the board of directors and shall serve at the
pleasure of the board of directors. Any two or more offices may be held by
the same person, except the offices of president and chief executive officer
and secretary.
Section 2. Appointment and Term of Office. The officers of the
corporation shall be appointed annually by the board of directors at the first
meeting of the board of directors held after each annual meeting of the
shareholders. If such appointments shall not be made at such meeting, such
appointments shall be made as soon thereafter as conveniently may be. Each
officer shall hold office until his successor shall have been duly appointed
or until his death or until he shall resign or shall have been removed in the
manner hereinafter provided.
Section 3. Removal. The board of directors may remove any officer
at any time with or without cause. The election or appointment of an officer
shall not of itself create contract rights; and the resignation or removal of
an officer shall not affect the contract rights, if any, of the corporation or
the officer.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term.
Section 5. Chairman of the Board. The chairman of the board shall
be a member of the board of directors and shall preside at meetings of the
board of directors and meetings of shareholders. He shall perform such
additional duties and exercise such authority as from time to time may be
assigned or delegated to him by the board of directors. He may sign, with the
secretary or any other proper officer of the corporation thereunto authorized
by the board of directors, certificates for shares of the corporation, and any
deeds, mortgages, bonds, contracts or other instruments which the board of
directors has authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the board of directors or by
these bylaws to some other officer or agent of the corporation or shall be
required by law to be otherwise signed or executed.
Section 6. President and Chief Executive Officer. The president
and chief executive officer shall be a member of the board of directors, shall
be the chief executive officer of the corporation and, subject to the control
of the board of directors, shall in general supervise and control all the
business and affairs of the corporation. In the absence of the chairman of
the board he shall preside at meetings of the shareholders. He shall have
general power to execute deeds, mortgages, bonds, contracts and other
instruments for and on behalf of the corporation, except in cases where the
execution thereof shall be expressly delegated by the board of directors or by
these bylaws to some other officer or agent of the corporation or shall be
required by law to be otherwise executed. He may sign, with the secretary or
any other proper officer of the corporation thereunto authorized by the board
of directors, certificates for shares of the corporation.
Section 7. Executive Vice-Presidents. The executive
vice-presidents shall perform such duties and exercise such authority as from
time to time may be assigned or delegated to them by the president and chief
executive officer or the board of directors. An executive vice-president may
sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the board of directors, certificates for shares of the
corporation.
Section 8. Vice-Presidents. The vice-presidents shall perform
such duties and exercise such authority as from time to time may be assigned
or delegated to them by the president and chief executive officer, an
executive vice-president or the board of directors. One or more of the
vice-presidents may be designated senior vice-president. Any vice-president
may sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the board of directors, certificates for shares of the
corporation.
Section 9. Chief Financial Officer. The chief financial officer
shall be the principal financial officer of the corporation. He shall in
general perform all duties incident to the office of the chief financial
officer and such other duties as from time to time may be assigned or
delegated to him by the president and chief executive officer or the board of
directors.
Section 10. Secretary. The secretary shall: (a) keep the minutes
of the shareholders' and of the board of directors' meetings in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these bylaws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; (d) keep
a register of the post office address of each shareholder which shall be
furnished to the secretary by such shareholder; (e) sign with the chairman of
the board, the president and chief executive officer, an executive
vice-president or a vice-president certificates for shares of the corporation
the issuance of which shall have been authorized by resolution of the board of
directors; (f) have general charge of the stock transfer books of the
corporation; and (g) in general perform all the duties incident to the office
of secretary and such other duties as from time to time may be assigned to him
by the president and chief executive officer or the board of directors.
Section 11. Treasurer. The treasurer shall:
(a) have charge and custody of and be responsible for all funds and securities
of the corporation; receive and give receipts for moneys due and payable to
the corporation from any source whatsoever, and deposit all such moneys in the
name of the corporation in such banks, trust companies or other depositaries
as shall be selected in accordance with the provisions of Article VI of these
bylaws; and (b) in general perform all the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him by
the president and chief executive officer, the chief financial officer or the
board of directors. If required by the board of directors, the treasurer
shall give a bond for the faithful discharge of his duties in such sum and
with such surety or sureties as the board of directors shall determine.
Section 12. Salaries. The salaries of the officers shall be fixed
from time to time by the board of directors and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE VI
Contracts, Loans, Checks and Deposits
Section 1. Contracts. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the board of directors. Such authority
may be general or confined to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation shall be signed in such manner as shall
from time to time be determined by resolution of the board of directors.
Section 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositaries as the president and
chief executive officer or the chief financial officer of the corporation may
select.
ARTICLE VII
Certificates For Shares and Their Transfer
Section 1. Certificates for Shares. Certificates representing
shares of the corporation shall be in such form as shall be determined by the
board of directors. Such certificates shall be signed by the chairman of the
board, the president and chief executive officer, an executive vice-president
or a vice-president and by the secretary or any other proper officer of the
corporation thereunto authorized by the board of directors and sealed with the
corporate seal or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles if the certificate is countersigned by a
transfer agent, or registered by a registrar, other than the corporation
itself or one of its employees. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
canceled, except as provided in Section 3 of this Article VII.
Section 2. Transfer of Shares. Transfer of shares of the
corporation shall be made only on the stock transfer books of the corporation
by the holder of record thereof or by his legal representative, who shall
furnish proper evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the secretary of
the corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the corporation
shall be deemed by the corporation to be the owner thereof for all purposes.
Section 3. Replacement of Certificates. In the event of the loss,
theft, mutilation or destruction of any certificate for shares, a duplicate
thereof may be issued and delivered to the owner thereof, provided he makes a
sufficient affidavit setting forth the material facts surrounding the loss,
theft, mutilation or destruction of the original certificate and gives a bond
with corporate surety to the corporation, its officers and agents, in an open
penalty amount indemnifying the corporation, its officers and agents, against
any losses, costs and damages suffered or incurred by reason of such loss,
theft, mutilation or destruction of the original certificate and replacement
thereof.
Section 4. Transfer Agents and Registrar. The board of directors
or executive committee may provide for transfer and registration of the stock
of the corporation in Portland, Oregon, and in such other place or places as
may be deemed advisable, and for such purpose may appoint and change from time
to time the necessary transfer agents and registrars. In case there shall be
more than one transfer agent and more than one registrar, the board of
directors or executive committee may provide for the interchange of
certificates countersigned by the several transfer agents and registrars. A
transfer agent of the corporation may also be designated as the dividend
disbursing agent of the corporation. Resolutions of the board of directors or
executive committee appointing transfer agents and registrars shall provide
for such terms and conditions as may be deemed advisable, including without
limitation provisions for indemnification of the transfer agents and
registrars and instructions to them by designated officers of the corporation.
ARTICLE VIII
Seal
The board of directors shall provide a corporate seal which shall be circular
in form and shall have inscribed thereon the name of the corporation and the
state of incorporation and the words, "Corporate Seal."
ARTICLE IX
Fiscal Year
The fiscal year of the corporation shall begin on the first day of
January and end on the thirty-first day of December in each year.
ARTICLE X
Amendments
These bylaws or any portion hereof may be amended by a vote of a majority of
the full board of directors at any meeting of the directors.
<PAGE>
Exhibit 12
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIESCOMPUTATION OF RATIO OF EARNINGS
TO FIXED CHARGES (DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
------------------------------------------- ----------------
1990 1991 1992 1993 1994 1994 1995
-------- ------- ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed Charges:
Interest cost $ 52,028 63,986 73,776 79,194 80,807 59,790 60,014
One-third rent
expense 2,948 3,725 4,495 4,819 5,227 3,892 4,350
-------- ------- ------- ------- ------- ------- -------
Total Fixed Charges $ 54,976 67,711 78,271 84,013 86,034 63,682 64,364
======== ======= ======= ======= ======= ======= =======
Add (Deduct):
Earnings before
income taxes $ 208,671 73,609 129,452 189,168 288,923 163,146 624,610
Interest capitalized (22,129) (723) (7,354) (15,904) (9,294) (6,845) (3,996)
-------- ------- ------- ------- ------- ------- -------
Earnings for
Fixed Charges $ 241,518 140,597 200,369 257,277 365,663 219,983 684,978
======== ======= ======= ======= ======= ======= =======
Ratio of Earnings to
Fixed Charges 4.39 2.08 2.56 3.06 4.25 3.45 10.64
======== ======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>
EXHIBIT 27
WILLAMETTE INDUSTRIES, INC.
FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED BALANCE SHEETS AND RELATED CONSOLIDATED STATEMENTS OF
EARNINGS FOR THE PERIOD ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 13,022
<SECURITIES> 1,000
<RECEIVABLES> 379,138
<ALLOWANCES> 5,198
<INVENTORY> 369,194
<CURRENT-ASSETS> 806,633
<PP&E> 3,948,792
<DEPRECIATION> 1,441,196
<TOTAL-ASSETS> 3,378,514
<CURRENT-LIABILITIES> 390,337
<BONDS> 915,630
0
0
<COMMON> 27,635
<OTHER-SE> 1,707,736
<TOTAL-LIABILITY-AND-EQUITY> 3,378,514
<SALES> 1,019,420
<TOTAL-REVENUES> 1,019,420
<CGS> 707,464
<TOTAL-COSTS> 707,464
<OTHER-EXPENSES> 49,054
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,853
<INCOME-PRETAX> 245,049
<INCOME-TAX> 94,344
<INCOME-CONTINUING> 150,705
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 150,705
<EPS-PRIMARY> 2.73
<EPS-DILUTED> 2.73
</TABLE>
