SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 1998
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
---------------
Commission file number 1-12545
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
WILLAMETTE INDUSTRIES
STOCK PURCHASE PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
WILLAMETTE INDUSTRIES, INC.
1300 S.W. FIFTH AVENUE, SUITE 3800
PORTLAND, OREGON 97201
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Index to Financial Statements and Schedules
Independent Auditors' Report dated May 21, 1999............ 1
Statements of Net Assets Available for Benefits at
December 30, 1998 and 1997................................. 2-3
Statements of Changes in Net Assets Available for Benefits
for the years ended December 30, 1998 and 1997............. 4-5
Notes to Financial Statements.............................. 6-10
Schedule of Assets Held for Investment Purposes............ 11
Schedule of Reportable Transactions......................... 12
Exhibit 23 - Consent of Independent Auditors dated June 23, 1999, to the
incorporation by reference of their report dated May 21, 1999,
into Registration Statement No. 33-59517 on Form S-8
<PAGE>
KPMG Peat Marwick LLP
Suite 2000
1211 South West Fifth Avenue
Portland, OR 97204
INDEPENDENT AUDITORS' REPORT
Willamette Industries Stock Purchase
Plan Committee
Willamette Industries Stock Purchase Plan:
We have audited the accompanying statements of net assets available for benefits
of Willamette Industries Stock Purchase Plan as of December 30, 1998 and 1997,
and the related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits as of December 30,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedules A and B is presented for purposes of complying with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 and is not a required part of the basic
financial statements. The supplemental information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ KPMG Peat Marwick LLP
May 21, 1999
Member Firm of KPMG International
1
<PAGE>
<TABLE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Statement of Net Assets Available for Benefits
December 30, 1998
Stable Willamette
Asset Balanced Equity Stock
Assets Fund Fund Fund Fund Total
------ ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Investments at fair value (note 6):
Cash and cash equivalents $ 10,000 10,000 10,000 1,631,779 1,661,779
Mutual funds - 14,987,019 28,696,041 - 43,683,060
Common stock - Willamette
Industries, Inc.; 6,884,164
shares - - - 230,604,837 230,604,837
Guaranteed investment contract
fund (GIC) 6,893,174 - - - 6,893,174
------------ ------------ ------------ ------------ ------------
Total investments 6,903,174 14,997,019 28,706,041 232,236,616 282,842,850
Accrued investment income 43 102 2 4,068 4,215
------------ ------------ ------------ ------------ ------------
Total assets 6,903,217 14,997,121 28,706,043 232,240,684 282,847,065
Liabilities
-----------
Benefits payable 14,250 189,873 240,035 6,055,272 6,499,430
------------ ------------ ------------ ------------ ------------
Net assets available for
benefits $ 6,888,967 14,807,248 28,466,008 226,185,412 276,347,635
============ ============ ============ ============= ============
</TABLE>
See accompanying notes to financial statements.
- 2 -
<PAGE>
<TABLE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Statement of Net Assets Available for Benefits
December 30, 1997
Stable Willamette
Asset Balanced Equity Stock
Assets Fund Fund Fund Fund Total
------ ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Investments at fair value (note 6):
Cash and cash equivalents $ 32,713 10,000 10,000 1,289,595 1,342,308
Mutual funds - 11,133,887 18,406,722 - 29,540,609
Common stock - Willamette
Industries, Inc.; 6,796,447
shares - - - 218,763,364 218,763,364
Guaranteed investment contract
fund (GIC) 6,726,213 - - - 6,726,213
------------ ------------ ------------ ------------ ------------
Total investments 6,758,926 11,143,887 18,416,722 220,052,959 256,372,494
Accrued investment income 69 86 130 6,702 6,987
------------ ------------ ------------ ------------ ------------
Total assets 6,758,995 11,143,973 18,416,852 220,059,661 256,379,481
Liabilities
-----------
Benefits payable 147,321 95,692 92,241 2,967,731 3,302,985
------------ ------------ ------------ ------------ ------------
Net assets available for
benefits $ 6,611,674 11,048,281 18,324,611 217,091,930 253,076,496
============= ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
- 3 -
<PAGE>
<TABLE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Statement of Changes in Net Assets Available for Benefits
Year Ended December 30, 1998
Stable Willamette
Asset Balanced Equity Stock
Fund Fund Fund Fund Total
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends $ - - 335,547 4,333,614 4,669,161
Interest and other income 916 412,905 1,826 45,920 461,567
Net change in fair value of
investments 399,171 1,734,286 5,581,006 10,072,238 17,786,701
------------ ------------ ------------ ------------ ------------
Total investment income 400,087 2,147,191 5,918,379 14,451,772 22,917,429
------------ ------------ ------------ ------------ ------------
Contributions (note 1):
Employer - - - 8,964,323 8,964,323
Employee 369,783 1,607,500 4,103,227 8,226,458 14,306,968
------------ ------------ ------------ ------------ ------------
Total contributions 369,783 1,607,500 4,103,227 17,190,781 23,271,291
------------ ------------ ------------ ------------ ------------
Transfers from other plans
(note 5) 94,932 126,383 220,945 12,903 455,163
------------ ------------ ------------ ------------ ------------
Total additions 864,802 3,881,074 10,242,551 31,655,456 46,643,883
Deductions from net assets attributed to:
Payments and stock distributions to
participants (844,654) (1,171,486) (1,269,121) (20,066,741) (23,352,002)
Administrative expenses (20,742) - - - (20,742)
Interfund transfers 277,887 1,049,379 1,167,967 (2,495,233) -
------------ ------------ ------------ ------------ ------------
Net change in assets 277,293 3,758,967 10,141,397 9,093,482 23,271,139
Net assets available for benefits:
Beginning of year 6,611,674 11,048,281 18,324,611 217,091,930 253,076,496
------------ ------------ ------------ ------------ ------------
End of year $ 6,888,967 14,807,248 28,466,008 226,185,412 276,347,635
============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
- 4 -
<PAGE>
<TABLE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Statement of Changes in Net Assets Available for Benefits
Year Ended December 30, 1997
Stable Willamette
Asset Balanced Equity Stock
Fund Fund Fund Fund Total
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends $ - - 267,162 4,340,998 4,608,160
Interest and other income 2,348 348,065 5,629 70,061 426,103
Net change in fair value of
investments 390,007 1,517,173 3,710,500 (17,905,570) (12,287,890)
------------ ------------ ------------ ------------ ------------
Total investment income 392,355 1,865,238 3,983,291 (13,494,511) ( 7,253,627)
------------ ------------ ------------ ------------ ------------
Contributions (note 1):
Employer - - - 8,507,277 8,507,277
Employee 290,995 1,031,835 2,714,774 6,095,142 10,132,746
------------ ------------ ------------ ------------ ------------
Total contributions 290,995 1,031,835 2,714,774 14,602,419 18,640,023
------------ ------------- ------------ ------------ ------------
Transfers from other plans
(note 5) 114,332 108,003 205,616 21,543 449,494
------------ ------------ ------------ ------------ ------------
Total additions 797,682 3,005,076 6,903,681 1,129,451 11,835,890
Deductions from net assets attributed to:
Payments and stock distributions to
participants (1,568,027) (1,073,633) (726,260) (27,858,040) (31,225,960)
Administrative expenses (15,506) - - - (15,506)
Interfund transfers 2,298,984 619,888 2,342,299 (5,261,171) -
------------ ------------ ------------ ------------ ------------
Net change in assets 1,513,133 2,551,331 8,519,720 (31,989,760) (19,405,576)
Net assets available for benefits:
Beginning of year 5,098,541 8,496,950 9,804,891 249,081,690 272,482,072
------------ ------------ ------------ ------------ ------------
End of year $ 6,611,674 11,048,281 18,324,611 217,091,930 253,076,496
------------ ------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to financial statements.
- 5 -
<PAGE>
Willamette Industries Stock Purchase Plan
Notes to Financial Statements
December 30, 1998 and 1997
(1) Description of the Plan
-----------------------
The following description of the Willamette Industries Stock Purchase Plan
(the Plan) is provided for general information purposes only. Participants
should refer to the Summary Plan Description for more complete information.
(a) General
-------
Eligible employees may elect to enroll in the Plan on the semi-annual
enrollment dates following six months of service. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
(b) Contributions
-------------
The Plan provides for elective contributions by participants under
Section 401(k) of the Internal Revenue Code. Effective December 31, 1997,
eligible employees of Willamette Industries, Inc. (the Company) and its
participating subsidiaries may contribute up to 15% for Non-Highly
Compensated Employees and 10% for Highly Compensated Employees of their
regular monthly gross cash earnings as established on January 1 of each
year. Prior to December 31, 1997, participants could elect to contribute
up to 7% of their regular earnings for each Plan year. Contributions are
subject to the limits set by Federal tax laws. The Company and its
participating subsidiaries contribute monthly an amount equal to 100% of
the contributions of its employees up to 6%, less the amount of any
forfeitures.
Participating employees may elect one of two methods of making
contributions. A participant may elect to make either:
1) Pre-tax contributions ("deferred contributions") which will not be
included in the participant's current earnings for federal income tax
purposes; or
2) After-tax contributions ("nondeferred contributions") which will be
included in the participant's current earnings for federal income tax
purposes.
Participating employees may direct that their own contributions be
invested in (a) a Stable Asset Fund holding primarily guaranteed
investment contracts (GIC's), (b) a Balanced Fund holding primarily
stocks and bonds, (c) an Equity Fund holding primarily stocks, or (d) a
Willamette Stock Fund holding common stock of the Company. The
contributions can be allocated among the four investment choices in
multiples of 5%. In addition, reallocation between investment choices is
allowed quarterly.
(Continued)
- 6 -
<PAGE>
Willamette Industries Stock Purchase Plan
Notes to Financial Statements
Employer and employee contributions by participating company for the
years ended December 30, 1998 and 1997 were as follows:
1998 1997
---- ----
Willamette Industries, Inc. $ 23,214,946 18,594,195
Wimer Logging Co. 56,345 45,828
---------- ----------
Total $ 23,271,291 18,640,023
========== ===========
The above contribution amounts are net of forfeitures of $554,926 for
1998 and $564,965 for 1997.
(c) Participant Accounts
--------------------
Each participant's accounts are credited with the participant's and
employer contributions and an allocation of Plan earnings.
(d) Vesting
-------
A participant's interest in his or her deferred contributions and
nondeferred contributions is always fully vested and is not subject to
forfeiture.
Each participant becomes vested in his or her Matching Account if while
employed by the Company the participant: (i) attains age 65; (ii)
completes five years of service; (iii) dies, or (iv) becomes totally and
permanently disabled.
Any part of a participant's Matching Account which is not vested at the
time employment terminates is forfeited when the participant incurs five
consecutive one-year periods of severance. A participant who is not yet
vested in his or her Matching Account who voluntarily withdraws from the
Plan does not forfeit the account merely by reason of withdrawal; the
participant's subsequent years of service continue to count towards the
vesting requirement.
If there is a complete discontinuance of contributions to the Plan by an
employer, then all participants employed by such employer become fully
vested in their Matching Accounts.
Each participant who is vested in his or her Matching Account can elect
to have any or all of the account diversified into one or more of the
available elective investment funds (other than the Willamette Stock
Fund). This diversification election applies only to the participant's
then existing Matching Account. Future matching contributions will be
invested in common stock of the Company. A participant can make more than
one diversification election, but a subsequent election can be made only
after a period of at least 10 years has elapsed since the most recent
election.
(Continued)
- 7 -
<PAGE>
Willamette Industries Stock Purchase Plan
Notes to Financial Statements
(e) Forfeitures
-----------
An employer's matching contribution is reduced by an amount equal to the
forfeiture of participants employed by that employer, but the forfeitures
are treated as a part of the matching contributions for purposes of
allocation. A forfeiture of the account is deemed to occur as of the
close of the plan year in which the participant incurs five consecutive
one-year periods of severance. The 1998 employer's contribution has been
reduced by $554,926 as a result of forfeitures.
There are 70,409 shares of Company stock and $53,330 in cash investments
subject to forfeiture relating to terminated employees as of December 30,
1998 with a total fair value of $2,412,032.
(f) Withdrawals
-----------
The Plan allows participants, during their employment, to withdraw and
receive certain amounts which are then vested, or to seek a withdrawal
based upon financial hardship as determined by the Plan Administrator in
accordance with Federal guidelines. A participant whose employment
terminates for any reason is entitled to a lump sum distribution of his
or her vested accounts.
(2) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of Accounting
-------------------
The Plan prepares its financial statements on the accrual basis of
accounting in accordance with generally accepted accounting principles.
(b) Valuation of Investments
------------------------
Wells Fargo acts as trustee for the Plan. The Balanced Fund, Equity Fund
and the Stable Asset Fund investments are valued at quoted market prices.
Willamette Industries, Inc. common stock is valued at the quoted market
price with all purchases and sales recorded on a trade-date basis.
Short-term and temporary investments (including cash and money market
funds) are valued at cost, which approximates market.
(c) Expenses of the Plan
--------------------
Substantially all expenses incurred in the administration of the Plan,
including legal fees, accounting fees, Trustee's fees and other charges
of the plan, are charged to and paid by the plan sponsor.
(Continued)
- 8 -
<PAGE>
Willamette Industries Stock Purchase Plan
Notes to Financial Statements
(d) Cash and Cash Equivalents
-------------------------
Amounts consist of cash and short-term investments in highly liquid
instruments such as money market accounts and other securities which
generally have maturities of less than three months at date of purchase.
(e) Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities at
the date of the financial statements and the reported amounts of
additions to and deductions from net assets during the reporting period.
Actual results could differ from those estimates.
(f) Restatement
-----------
The Company declared a 2-for-1 stock split effective September 12, 1997.
As a result, all share amounts in the Willamette Stock Fund have been
restated to reflect the split.
(3) Plan Termination
----------------
The Board of Directors of the Company has reserved the right to amend or
terminate the Plan. A participating employer may also terminate the Plan at
any time with respect to its employees. No amendment may reduce the accrued
benefits of any participant or give an employer any interest in the assets
of the Plan. In the event of termination of the Plan, a participant with
respect to whom the Plan has been terminated becomes vested in his or her
Matching Account.
(4) Income Taxes
------------
The Plan obtained its latest determination letter on August 21, 1996, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. This ruling reflects the Plan amendments adopted on September 3, 1996.
Additional amendments have been made to the Plan since that time. If the
Plan is not in compliance with the requirements of the Internal Revenue Code
Section 401(a) and the related trust is not exempt under Internal Revenue
Code Section 501(a), the Company will take corrective actions to meet the
requirements of the Internal Revenue Code.
(Continued)
- 9 -
<PAGE>
Willamette Industries Stock Purchase Plan
Notes to Financial Statements
Amounts contributed to the Plan by the employer are not taxed to the
employee until distribution upon withdrawal, retirement or other
termination. Employee after-tax contributions are taxable in the year made
but not upon distribution. Employees may elect to make pre-tax contributions
which are not included in the employee's current earnings for federal income
tax purposes, but rather are taxable upon distribution. Any increase in the
value of common stock distributed is taxable to the employee when the stock
is sold.
(5) Transfers From Other Plans
--------------------------
Transfers from other plans in 1998 and 1997 resulted from hourly employees
becoming salaried employees.
(6) Investments
-----------
The fair value of individual investments that represent 5% or more of the
Plan's net assets are as follows:
1998 1997
---- ----
Willamette Industries, Inc. common
stock (6,884,164 and 6,796,447
shares in 1998 and 1997, respectively) $ 230,604,837 218,763,364
Vanguard Institutional Index Fund
(254,285 and 205,524 shares
in 1998 and 1997, respectively) $ 28,696,041 18,406,722
Vanguard Balanced Index Fund
(810,986 and 683,480 shares
in 1998 and 1997, respectively) $ 14,987,019 11,133,887
The total unrealized gain (loss) at December 30, 1998 and 1997 and the
related change by investment type for 1998 were as follows:
1997 Net change 1998
---- ---------- ----
Common stock $ 102,167,705 (1,537,369) 100,630,336
Mutual funds 4,932,976 6,449,368 11,382,344
Guaranteed investment contract 992,285 127,500 1,119,785
------------ ---------- ------------
$ 108,092,966 5,039,499 113,132,465
============ ========== ============
- 10 -
<PAGE>
Schedule A
----------
Willamette Industries Stock Purchase Plan
Line 27a - Schedule of Assets Held
for Investment Purposes
December 30, 1998
<TABLE>
Description of Current
Identity of issue investment Cost value
----------------- ---------- ---- -----
<S> <C> <C>
*Wells Fargo:
Short Term Income Fund Money market fund $ 1,661,779 1,661,779
=========== ===========
Vanguard:
Balanced Index Fund Mutual fund - 810,986 shares 12,142,612 14,987,019
Institutional Index Fund Mutual fund - 254,285 shares 20,158,104 28,696,041
----------- -----------
Mutual Funds $ 32,300,716 43,683,060
=========== ===========
*Willamette Industries, Common stock - 6,884,164
Inc. shares $ 129,974,501 230,604,837
=========== ===========
U.S. Trust Capital Guaranteed investment contract
Preservation Fund 220,483 units $ 5,773,389 6,893,174
=========== ===========
</TABLE>
*Party in interest.
- 11 -
<PAGE>
Schedule B
----------
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Line 27d - Schedule of Reportable Transactions
Year ended December 30, 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Number Book
Identity of Description Number Purchase of sales or Selling value Net
party involved of assets of purchases price disbursements price at sale gain
-------------- --------- ------------ ----- ------------- ----- ------- ----
Willamette Industries, Inc. Common stock 60 $ 15,764,604 316 $14,038,157 $ 8,162,755 $5,875,402
Wells Fargo:
Short Term Income Fund Money market
fund 132 33,276,342 133 30,371,272 230,371,272 -
</TABLE>
- 12 -
<PAGE>
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
WILLAMETTE INDUSTRIES
STOCK PURCHASE PLAN
(Name of Plan)
By: WILLAMETTE INDUSTRIES STOCK
PURCHASE PLAN COMMITTEE
By: /s/ J.A. PARSONS
J. A. Parsons, Secretary
Dated: June 24, 1999
KPMG Peat Marwick LLP
Suite 2000
1211 South West Fifth Avenue
Portland, OR 97204
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Willamette Industries, Inc:
We consent to incorporation by reference in the Registration Statement No.
33-59517 on Form S-8 of Willamette Industries, Inc. of our report dated May 21,
1999 relating to the statements of net assets available for benefits of
Willamette Industries Stock Purchase Plan as of December 30, 1998 and 1997, and
the related statements of changes in net assets available for benefits and
supplemental schedules referred to in our report, which report appears in the
December 30, 1998 annual report on Form 11-K of Willamette Industries Stock
Purchase Plan.
/s/ KPMG Peat Marwick LLP
June 23, 1999
Member Firm of KPMG International
