<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
June 30, 1995
-------------
Commission File Number 0-3730
------
Willamette Industries, Inc.
------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
State of Oregon 93-0312940
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3800 First Interstate Tower, Portland, Oregon 97201
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(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: 55,174,322, August 3, 1995.
---------------------------
<PAGE>
<TABLE>
<CAPTION>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollar amounts, except per share amounts, in thousands)
June 30, December 31,
ASSETS 1995 1994
------ --------- ----------
<S> <C> <C>
Current assets:
Cash $ 15,705 12,798
Receivables, net of allowance
for doubtful accounts of $4,976 and $5,278 372,569 283,055
Inventories (Note 2) 334,139 256,091
Prepaid expenses and deposits on timber cutting contracts 58,329 52,710
--------- ----------
Total current assets 780,742 604,654
Timber, timberlands and related facilities, net 513,048 509,075
Property, plant and equipment, at cost less
accumulated depreciation of $1,396,871 and $1,301,882 1,962,234 1,863,505
Other assets 62,855 56,164
--------- ----------
Total assets $ 3,318,879 3,033,398
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt $ 1,783 50,956
Notes payable 113,000 100,000
Accounts payable, including book overdrafts
of $67,819 and $48,589 194,114 173,549
Accrued expenses 146,963 118,667
Accrued income taxes 26,884 22,954
--------- ----------
Total current liabilities 482,744 466,126
Deferred income taxes 284,385 231,717
Other liabilities 33,772 31,893
Long-term debt 924,353 915,797
Stockholders' equity:
Common stock, $.50 par value. Authorized 75,000,000
shares; issued 55,087,721 and 55,036,191 shares. 27,544 27,518
Capital surplus 295,780 293,756
Retained earnings 1,270,301 1,066,591
--------- ----------
Total stockholders' equity 1,593,625 1,387,865
--------- ----------
Total liabilities & stockholders' equity $ 3,318,879 3,033,398
========= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q
CONSOLIDATED STATEMENTS OF EARNINGS PART I
(dollar amounts, except per share amounts, in thousands) ITEM 1
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 1,003,547 728,701 1,904,185 1,408,402
Cost of sales 714,558 617,147 1,385,367 1,181,884
---------- ---------- ---------- ----------
Gross profit 288,989 111,554 518,818 226,518
Selling and administrative expenses 52,079 44,755 101,481 90,186
---------- ---------- ---------- ----------
Operating earnings 236,910 66,799 417,337 136,332
Other income (expense), net 504 (404) 389 (554)
---------- ---------- ---------- ----------
237,414 66,395 417,726 135,778
Interest expense, net 18,964 18,053 38,165 33,965
---------- ---------- ---------- ----------
Earnings before taxes 218,450 48,342 379,561 101,813
Provision for income taxes 84,103 18,612 146,131 39,198
---------- ---------- ---------- ----------
Net earnings $ 134,347 29,730 233,430 62,615
========== ========== ========== ==========
Weighted average number of
shares outstanding 55,066,119 55,026,874 55,054,527 55,005,562
========== ========== ========== ==========
Per share information:
Net earnings $ 2.44 0.54 4.24 1.14
========== ========== ========== ==========
Dividends $ 0.27 0.24 0.54 0.48
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands) ITEM 1
Six Months Ended
June 30,
-------------------------
1995 1994
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 233,430 62,615
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 105,243 92,683
Cost of fee timber harvested 11,674 10,493
Other amortization 3,099 2,437
Increase in deferred income taxes 52,668 9,800
Changes in working capital items:
Accounts receivable (89,514) (61,176)
Inventories (78,048) (7,282)
Prepaid expenses and deposits on timber
cutting contracts (5,619) (2,284)
Accounts payable and accrued expenses 48,861 9,165
Accrued income taxes 3,930 (6,281)
--------- --------
Net cash provided by operating activities 285,724 110,170
--------- --------
Cash flows from investing activities:
Proceeds from sale of equipment 465 1,869
Expenditures for property, plant and equipment (204,457) (152,346)
Expenditures for timber and timberlands, net (14,805) (9,896)
Expenditures for roads and reforestation (3,395) (3,220)
Other (5,245) 772
--------- --------
Net cash used in investing activities (227,437) (162,821)
--------- --------
Cash flows from financing activities:
Debt borrowing 72,865 69,000
Proceeds from sale of capital stock 1,957 4,710
Cash dividends (29,720) (26,400)
Payment on debt (100,482) (576)
--------- --------
Net cash provided by financing activities (55,380) 46,734
--------- --------
Net change in cash 2,907 (5,917)
Cash at beginning of period 12,798 9,543
--------- --------
Cash at end of period $ 15,705 3,626
========= ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) $ 39,277 33,744
========= ========
Income taxes $ 89,533 34,068
========= ========
</TABLE>
<PAGE>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 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):
June 30, December 31,
1995 1994
-------- ---------
Finished product $ 93,459 72,229
Work in process 6,389 6,794
Raw material 161,301 114,596
Supplies 72,990 62,472
-------- ---------
$334,139 256,091
======== =========
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
June 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 the basic
raw material. The cost of timber is sensitive to various supply and demand
factors, including environmental issues affecting log supply.
RESULTS OF OPERATIONS
---------------------
2nd Quarter 1995 vs. 2nd Quarter 1994
-------------------------------------
Net sales increased 37.7% in the second quarter of 1995 compared with the
second quarter of 1994. Paper product sales increased 60.8%. Sales price
realizations increased significantly in all paper product lines. In the
Company's bleached paper product lines, selling prices for bleached hardwood
market pulp increased 108.8% while prices for continuous stock computer forms
and cut sheet copy paper, the Company's two major converted bleached paper
products, were up 66.1% and 63.3% respectively from levels for the second
quarter of 1994. Selling prices in the Company's unbleached paper product
lines were also significantly higher as paper bags and corrugated containers,
the Company's major unbleached converted paper products, increased 63.7% and
38.8% respectively over levels from the second quarter of 1994. Unit sales
volumes exceeded levels from the same period a year ago by at least 10.6% in
all the bleached paper product lines. However, unit sales volumes decreased by
7.5% and 2.5% respectively in the Company's paper bag and corrugated container
product lines as these markets showed a slowing of demand through the second
quarter of 1995. Building materials sales increased 0.7% compared with the
second quarter of 1994. Unit sales volumes decreased in all building materials
product lines except for lumber. Composite board product
volumes were lower as customers adjusted their inventories to reflect a
somewhat lower demand for these products. Plywood volumes were lower due to
the closure of the Sweet Home, Oregon plywood plant in the third quarter of
1994. Except for lumber, selling prices in all building materials product
lines were higher than those from the second quarter of 1994; however,
downward pressure was exerted on all building materials prices during the
second quarter of 1995 due mainly to higher interest rates and declining
housing markets.
Gross profit margins increased to 28.8% in the second quarter of 1995 from
15.3% in the second quarter of 1994. Paper product gross margins increased to
30.7% from 9.8% in the second quarter of 1994 as average sales prices
continued to increase in all paper product lines. Partially offsetting the
favorable sales related gross margin improvement was the continued 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 second quarter of
1995 increased nearly 222% compared with the same period in 1994. Building
materials gross margins were 24.2% in the second quarter of 1995 which is the
same as the margin realized in the second quarter of 1994.
Selling and administrative expenses declined to 5.2% of net sales in the
second quarter of 1995 compared with 6.1% for the same period in 1994. The
decline was due to higher sales as selling and administrative expenses
increased 16.4% between the two periods due mainly to expansion of the
Company's operations.
Interest expense was $19.0 million in the second quarter of 1995 compared with
$18.1 million in the second quarter of 1994. Interest expense increased
primarily due to rising interest rates and lower capitalized interest. The
Company's effective interest rate on average outstanding debt increased from
7.32% for the second quarter of 1994 to 7.92% for the same period in 1995.
Capitalized interest declined to $1.2 million in the second quarter of 1995
compared with $1.9 million in the same period of 1994.
Six Months ended June 30, 1995 vs.
----------------------------------
Six Months ended June 30, 1994
------------------------------
Net sales increased 35.2% in the first six months of 1995 from the comparable
period of 1994. Paper product sales increased 56.6%. Sales price realizations
increased and, with the exception of paper bags, unit sales volumes were
higher in all paper product lines in the first six months of 1995 compared
with the same period of a year ago. Building materials sales increased 1.8% in
the six months ended June 30, 1995 as increases in sales price realizations
more than offset decreases in sales volumes from prior year levels.
The gross profit margin was 27.2% for the six months ended June 30, 1995
compared to 16.1% for the comparable period in 1994. Paper product gross
margins increased to 28.8% for the first six months of 1995 compared with
10.3% for the six months ended June 30, 1994 reflecting mostly higher sales
price realizations and higher unit sales volumes. Building materials gross
profit margins decreased to 23.7% compared with 25.2% in the first six months
of 1994. The decrease in building materials margins is primarily due to
increases in log costs coupled with higher glue and resin costs. Log costs in
the Southern and Atlantic regions of the U.S. increased primarily due to
supply, demand and weather factors.
Selling and administrative expenses declined to 5.3% of net sales in the first
six months of 1995 compared with 6.4% for the same period in 1994. The
decline was due to higher sales as selling and administrative expenses
increased 12.5% between the two periods mainly due to expansion of the
Company's operations.
Interest expense was $38.2 million in the first six months of 1995 compared to
$34.0 million in the first six months of 1994. Interest expense increased
primarily due to rising interest rates and lower capitalized interest. The
Company's effective interest rate on average outstanding debt increased from
7.30% for the first half of 1994 to 7.96% for the same period in 1995.
Capitalized interest declined to $2.7 million in the first half of 1995
compared with $5.2 million in the same period of 1994.
Financial Condition as of June 30, 1995
---------------------------------------
During the first six months of 1995, the Company had capital expenditures of
$222.7 million that were funded by internally generated cash flows. Cash
flows from operating activities have increased $175.6 million or 159.3% in the
first six 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 six months
of 1995, higher operating cash flows have allowed the Company to reduce its
net debt outstanding by $27.6 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 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 39.5% at June 30, 1995 from
43.5% at December 31, 1994. Net working capital increased to $298.0 million
at June 30, 1995 from $138.5 million at December 31, 1994. The change in net
working capital is primarily due to increases in receivables and inventories.
Receivables have increased $89.5 million from December 31, 1994 mainly due to
higher sales volumes as the days sales outstanding ratio has declined from
32.5 days at December 31, 1994 to 30.6 days at June 30, 1995. Inventories
have increased $78.0 million mostly due to the following factors: inventory
quantities were unusually low at December 31, 1994, inventories were acquired
in conjunction with the purchase of the Kingsport, Tennessee paper mill and
generally higher prices for the Company's non-manufactured inventories.
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 million. As of the date of this filing, none of the
debt securities have been issued.
On August 3, 1995 the Board of Directors of the Company voted to increase the
quarterly cash dividend from $.27 per share to $.30 per share; however, there
is no assurance to future dividends as they are dependent upon earnings,
capital requirements and financial condition. The Board of Directors of the
Company at its August 3, 1995 meeting authorized the repurchase of up to $100
million of the Company's common stock and a $365 million expansion of the fine
paper mill located in Hawesville, Kentucky which the Company expects to
complete in 1998.
<PAGE>
FORM 10-Q
PART II
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits
--------
Exhibit No. Exhibit
---------- -------
3.B Bylaws of the registrant
as amended through August 3, 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: August 7, 1995
<PAGE>
<PAGE>
EXHIBIT 3.B
BYLAWS
OF
WILLAMETTE INDUSTRIES, INC.
AS AMENDED THROUGH
August 3, 1995
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I Offices 1
Section 1. Principal Office 1
Section 2. Registered Office 1
ARTICLE II Shareholders 1
Section 1. Annual Meeting 1
Section 2. Special Meetings 2
Section 3. Place of Meeting 2
Section 4. Notice of Meeting 2
Section 5. Quorum; Manner of Acting 3
Section 6. Proxies 3
Section 7. Voting of Shares 4
Section 8. Acceptance of Votes 4
ARTICLE III Board of Directors 5
Section 1. General Powers 5
Section 2. Number, Tenure and Classification 5
Section 3. Regular Meetings 6
Section 4. Special Meetings 6
Section 5. Notice; Waiver 6
Section 6. Quorum 7
Section 7. Manner of Acting 8
Section 8. Vacancies 8
Section 9. Presumption of Assent 8
Section 10. Removal of Directors 8
Section 11. Compensation 9
Section 12. Retirement 9
Section 13. Emeritus Director 9
Section 14. Action Without a Meeting 10
Section 15. Telephonic Meetings 10
Section 16. Notification of Nominations 10
ARTICLE IV Executive Committee and
Other Committees 12
Section 1. Appointment 12
Section 2. Authority 12
Section 3. Tenure and Qualifications 13
Section 4. Meetings; Notice; Waiver 13
Section 5. Quorum; Manner of Acting 14
Section 6. Action Without a Meeting 14
Section 7. Vacancies 14
Section 8. Resignations and Removal 14
Section 9. Procedure 14
Section 10. Appointment of Other Committees
of the Board of Directors 15
Section 11. Appointment of Other Committees 15
ARTICLE V Officers 16
Section 1. Number 16
Section 2. Election and Term of Office 16
Section 3. Removal 17
Section 4. Vacancies 17
Section 5. Chairman of the Board 17
Section 6. President 18
Section 7. Executive Vice-Presidents 18
Section 8. Vice-Presidents 19
Section 9. Financial Vice-President 19
Section 10. Secretary 19
Section 11. Treasurer 20
Section 12. Assistant Secretaries and
Assistant Treasurers 20
Section 13. Salaries 21
ARTICLE VI Contracts, Loans, Checks and Deposits 21
Section 1. Contracts 21
Section 2. Loans 22
Section 3. Checks, Drafts, etc. 22
Section 4. Deposits 22
ARTICLE VII Certificates For Shares and Their Transfer 22
Section 1. Certificates for Shares 22
Section 2. Transfer of Shares 23
Section 3. Replacement of Certificates 23
Section 4. Transfer Agents and Registrars 24
ARTICLE VIII Seal 25
ARTICLE IX Fiscal Year 25
ARTICLE X Amendments 25
<PAGE>
BYLAWS
OF
WILLAMETTE INDUSTRIES, INC.
AS AMENDED THROUGH
August 3, 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 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, 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, one or more vice-presidents (the number
thereof to be determined by the board of directors), a financial
vice-president, a secretary and a treasurer, each of whom shall be elected by
the board of directors. Two or more executive vice-presidents and such other
officers and assistant officers as may be deemed necessary may be elected or
appointed by the board of directors. Any two or more offices may be held by
the same person, except the offices of chairman of the board and secretary, or
president and secretary.
Section 2. Election and Term of Office. The officers of the
corporation to be elected by the board of directors shall be elected annually
by the board of directors at the first meeting of the board of directors held
after each annual meeting of the shareholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Each officer shall hold office until his
successor shall have been duly elected 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, shall preside at meetings of the board
and meetings of shareholders and shall have authority to execute contracts and
other instruments for and on behalf of the corporation. He 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. 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. The president shall be the chief operations
officer of the corporation. In the absence of the chairman of the board he
shall preside at meetings of the shareholders. 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; and in general he shall
perform all duties incident to the office of president and such other duties
as may be prescribed by the board of directors from time to time.
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 chairman of the board
or the board of directors. An executive vice-president may sign, with the
secretary, 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 chairman of the board, the president, 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 an assistant secretary, certificates for shares of the
corporation.
Section 9. Financial Vice-President. The financial vice-president
shall be the principal financial officer of the corporation. The financial
vice-president may sign with the secretary or assistant secretary certificates
for shares of the corporation, and shall perform such other duties as from
time to time may be assigned to him by the chairman of the board 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, an executive vice-president, a vice-president or the
financial 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 duties incident to the office of
secretary and such other duties as from time to time may be assigned to him by
the chairman of the board, the president 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 chairman of the board, the president, the financial vice-president 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. Assistant Secretaries and Assistant Treasurers. The
assistant secretaries, when authorized by the board of directors, may sign
with the chairman of the board, the president, an executive vice-president, a
vice-president or financial vice-president certificates for shares of the
corporation the issuance of which shall have been authorized by a resolution
of the board of directors. The assistant treasurers shall, respectively, if
required by the board of directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the board of directors
shall determine. The assistant secretaries and assistant treasurers, in
general, shall perform such duties as shall be assigned to them by the
secretary or the treasurer, respectively, or by the chairman of the board, the
president, the financial vice-president or the board of directors.
Section 13. 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 chairman of the
board, the president or the financial vice-president of this 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, an executive vice-president, a vice-president or
financial vice-president and by the secretary or an assistant secretary 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 Registrars. 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>
<TABLE>
<CAPTION>
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLAR AMOUNTS IN THOUSANDS)
Six Months Ended
Year Ended December 31, June 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 39,140 40,827
One-third rent
expense 2,948 3,725 4,495 4,819 5,227 2,644 2,831
------- ------- ------- ------- ------ ------- -------
Total Fixed Charges $ 54,976 67,711 78,271 84,013 86,034 41,784 43,658
======= ======= ======= ======= ======= ======= =======
Add (Deduct):
Earnings before
income taxes $ 208,671 73,609 129,452 189,168 288,923 101,813 379,561
Interest capitalized (22,129) (723) (7,354) (15,904) (9,294) (5,175) (2,662)
------- ------- ------- ------- ------ ------- -------
Earnings for
Fixed Charges $ 241,518 140,597 200,369 257,277 365,663 138,422 420,557
======= ======= ======= ======= ======= ======= =======
Ratio of Earnings to
Fixed Charges 4.39 2.08 2.56 3.06 4.25 3.31 9.63
======= ======= ======= ======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE COMPANY'S CONSOLIDATED BALANCE
SHEETS AND RELATED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 15,705
<SECURITIES> 0
<RECEIVABLES> 377,545
<ALLOWANCES> 4,976
<INVENTORY> 334,139
<CURRENT-ASSETS> 780,742
<PP&E> 3,872,153
<DEPRECIATION> 1,396,871
<TOTAL-ASSETS> 3,318,879
<CURRENT-LIABILITIES> 482,744
<BONDS> 924,353
0
0
<COMMON> 27,544
<OTHER-SE> 1,566,081
<TOTAL-LIABILITY-AND-EQUITY> 3,318,879
<SALES> 1,003,547
<TOTAL-REVENUES> 1,003,547
<CGS> 714,558
<TOTAL-COSTS> 714,558
<OTHER-EXPENSES> 51,575
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,964
<INCOME-PRETAX> 218,450
<INCOME-TAX> 84,103
<INCOME-CONTINUING> 134,347
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 134,347
<EPS-PRIMARY> 2.44
<EPS-DILUTED> 2.44
</TABLE>
