<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the year ended December 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
------------ ------------
COMMISSION FILE NUMBER 1-6780
RAYONIER INC.
Incorporated in the State of North Carolina
I.R.S. Employer Identification No. 13-2607329
1177 SUMMER STREET, STAMFORD, CT 06905-5529
(Principal Executive Office)
Telephone Number: (203) 348-7000
Securities registered pursuant to Section 12(b) of the Act,
all of which are registered on the New York Stock Exchange:
Common Shares
7.5% Notes, due October 15, 2002
Medium Term Notes, due 1995-1999
Securities registered pursuant to Section 12(g) of the Act: None
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 and (2) has been subject to such filing requirements for
the past 90 days.
YES /x/ NO / /
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of the Form 10-K or any amendment to this
Form 10-K. /x/
---
The aggregate market value of the Common Shares of the registrant held by
non-affiliates of the Registrant on March 15, 1995 was approximately $839
million.
As of March 15, 1995, there were outstanding 29,611,469 Common Shares of the
Registrant.
The registrant's definitive proxy statement filed or to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A involving the
election of directors at the annual meeting of the shareholders of the
registrant scheduled to be held on May 19, 1995, is incorporated by reference in
Part III of this Form 10-K.
<PAGE> 2
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. is hereby amended to correct a typographical error in Footnote 15
"Segment Information" on Page F-17. The following correction is made:
The 1994 balance of Identifiable Assets for the Timber and Wood Products
segment is changed from $787 million to $685 million. The 1994 balance
of Identifiable Assets for the Specialty Pulp Products segment is
changed from $685 million to $787 million.
See "Index to Financial Statements" on Page ii.
<PAGE> 3
REPORT OF MANAGEMENT
Rayonier management is responsible for the preparation and integrity of the
information contained in the accompanying financial statements. The statements
were prepared in accordance with generally accepted accounting principles and,
where necessary, include amounts that are based on management's best judgments.
Rayonier's system of internal controls includes accounting controls and an
internal audit program. This system is designed to provide reasonable assurance
that Rayonier's assets are safeguarded, transactions are properly recorded and
executed in accordance with management's authorization, and fraudulent financial
reporting is prevented or detected.
Rayonier's internal controls provide for the careful selection and training of
personnel and for appropriate divisions of responsibility. The controls are
documented in written codes of conduct, policies, and procedures that are
communicated to Rayonier's employees. Management continually monitors the system
of internal controls for compliance. Rayonier's independent public accountants,
Arthur Andersen LLP, evaluate and test internal controls as part of their annual
audit and make recommendations for improving internal controls. Management takes
appropriate action in response to each recommendation. The Board of Directors
and the officers of Rayonier monitor the administration of Rayonier's policies
and procedures and the preparation of financial reports.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Rayonier Inc.:
We have audited the accompanying consolidated financial statements of Rayonier
Inc. (a North Carolina corporation) and subsidiaries as of December 31, 1994 and
1993, and for each of the three years in the period ended December 31, 1994, as
described in the Index to Financial Statements. These financial statements are
the responsibility of Rayonier'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 financial position of Rayonier Inc. and subsidiaries
as of December 31, 1994 and 1993, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.
As discussed in the accompanying notes to financial statements, in 1992,
Rayonier adopted two new accounting standards promulgated by the Financial
Accounting Standards Board, changing its methods of accounting for
postretirement benefits other than pensions and postemployment benefits.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
January 31, 1995
F-1
<PAGE> 4
RAYONIER INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
For the Three Years Ended December 31, 1994
(Thousands of dollars, except per share data)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Sales $1,069,494 $936,310 $ 973,673
---------- -------- ---------
Costs and expenses
Cost of sales 877,439 780,831 821,571
Selling and general expenses 27,676 27,390 32,228
Commission expenses 1,021 885 13,115
Other operating (income) expenses, net (5,989) (2,641) 4,639
Provision for dispositions -- 2,679 188,724
---------- -------- ---------
900,147 809,144 1,060,277
---------- -------- ---------
Operating income (loss) 169,347 127,166 (86,604)
Equity in net loss of
Grays Harbor Paper Company -- -- (3,257)
Interest expense (31,065) (23,368) (21,327)
Interest and miscellaneous income, net 2,207 1,608 2,004
Minority interest (32,419) (22,508) (22,702)
---------- -------- ---------
Income (loss) before income taxes 108,070 82,898 (131,886)
Income tax (expense) benefit (38,038) (30,432) 50,366
---------- -------- ---------
Income (loss) before cumulative effect
of accounting changes 70,032 52,466 (81,520)
Cumulative effect of accounting changes (SFAS No. 106
and SFAS No. 112) net of tax benefit of $11,310 -- -- (21,956)
---------- -------- ---------
Net income (loss) $ 70,032 $ 52,466 $(103,476)
========== ======== =========
Earnings (loss) per Common Share:
Income (loss) before cumulative effect
of accounting changes $2.36 $1.77 $(2.77)
===== ===== ======
Cumulative effect of accounting changes $ -- $ -- $(0.74)
===== ===== ======
Net income (loss) $2.36 $1.77 $(3.51)
===== ===== ======
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these consolidated statements.
F-2
<PAGE> 5
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31, 1994 and 1993
(Thousands of dollars)
ASSETS
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash $ 9,178 $ 5,989
Accounts receivable, less allowance for doubtful
accounts of $4,358 and $4,268 103,892 82,696
Inventories
Finished goods 39,929 46,516
Work in process 18,221 16,235
Raw materials 34,022 44,057
Manufacturing and maintenance supplies 27,567 26,751
---------- ----------
119,739 133,559
Deferred income taxes 4,382 10,498
Prepaid timber stumpage 47,338 55,770
Other current assets 12,692 10,752
---------- ----------
Total current assets 297,221 299,264
OTHER ASSETS 29,439 24,025
TIMBER STUMPAGE 36,756 12,480
TIMBER, TIMBERLANDS, AND LOGGING ROADS,
NET OF DEPLETION AND AMORTIZATION 476,132 470,077
PROPERTY, PLANT, AND EQUIPMENT
Land, buildings, machinery, and equipment 1,202,484 1,149,447
Less - accumulated depreciation 530,857 480,518
---------- ----------
671,627 668,929
---------- ----------
$1,511,175 $1,474,775
========== ==========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these consolidated statements.
F-3
<PAGE> 6
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31, 1994 and 1993
(Thousands of dollars)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 83,658 $ 67,783
Bank loans 84 180,800
Current maturities of long-term debt 218 1,203
Accrued taxes 7,676 2,480
Accrued payroll and benefits 20,043 18,525
Accrued interest 4,515 4,446
Other current liabilities 37,316 35,330
Current reserves for dispositions and
discontinued operations 25,370 27,280
---------- ----------
Total current liabilities 178,880 337,847
DEFERRED INCOME TAXES 127,638 126,176
LONG-TERM DEBT 482,920 316,138
NONCURRENT RESERVES FOR DISPOSITIONS AND
DISCONTINUED OPERATIONS (Net of discontinued
operations' assets of $13,023 and $12,986) 20,325 35,920
OTHER NONCURRENT LIABILITIES 23,695 15,741
MINORITY INTEREST 22,516 36,649
SHAREHOLDERS' EQUITY
Common Shares, 60 million shares authorized,
29,574,807 and 29,565,392 shares issued
and outstanding 157,581 157,426
Retained earnings 497,620 448,878
---------- ----------
655,201 606,304
---------- ----------
$1,511,175 $1,474,775
========== ==========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these consolidated statements.
F-4
<PAGE> 7
RAYONIER INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED RETAINED EARNINGS
For the Three Years Ended December 31, 1994
(Thousands of dollars)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Balance, beginning of year $448,878 $518,252 $639,258
Net income (loss) 70,032 52,466 (103,476)
Cash dividends to shareholders (21,290) -- --
Cash dividends to ITT Corporation -- (121,840) (17,530)
-------- -------- --------
Balance, end of year $497,620 $448,878 $518,252
======== ======== ========
</TABLE>
STATEMENTS OF CONSOLIDATED COMMON SHARES
AND CUMULATIVE PREFERRED STOCK
For the Three Years Ended December 31, 1994
(Thousands of dollars, except for shares)
<TABLE>
<CAPTION>
Cumulative
Common Shares Preferred Stock
------------------------- ----------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Balance, January 1, 1992 29,565,392 $157,426 -- $ --
Issuance of Cumulative
Preferred Stock -- -- 30,000 30,000
Redemption of Cumulative
Preferred Stock -- -- (30,000) (30,000)
---------- -------- ------- -------
Balance, December 31, 1992 29,565,392 157,426 -- --
---------- -------- ------- -------
Balance, December 31, 1993 29,565,392 157,426 -- --
Common Shares issued
under stock option plans 9,415 155 -- --
---------- -------- ------ -------
Balance, December 31, 1994 29,574,807 $157,581 -- $ --
========== ======== ====== =======
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these consolidated statements.
F-5
<PAGE> 8
RAYONIER INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Three Years Ended December 31, 1994
(Thousands of dollars)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 70,032 $ 52,466 $(103,476)
Cumulative effect of accounting changes -- -- 21,956
--------- --------- ---------
Income (loss) before cumulative effect of accounting changes 70,032 52,466 (81,520)
Non-cash items included in income
Depreciation, depletion, and amortization 90,200 78,272 77,885
Deferred income taxes 3,007 37,291 (56,938)
Equity in undistributed losses of Grays Harbor Paper Company -- -- 3,257
Write-down of property, plant, and equipment -- -- 81,804
Increase (decrease) in other noncurrent liabilities 7,954 (10,284) (1,387)
Change in accounts receivable, inventories, and accounts payable 8,499 (5,887) (13,711)
Decrease (increase) in prepaid timber stumpage 8,432 (15,226) 2,391
Change in reserves for dispositions and discontinued operations (5,221) 2,679 106,920
Other changes in working capital 6,829 (21,002) 14,354
--------- -------- --------
Cash from operating activities 189,732 118,309 133,055
--------- --------- ---------
INVESTING ACTIVITIES
Capital expenditures, net of sales, retirements,
and reclassifications of $1,678, $167, and $755 (98,953) (71,589) (96,289)
New Zealand forest assets acquisition -- -- (196,500)
Expenditures for dispositions and discontinued operations, net
of tax benefits (payments) of $4,571, $10,318, and ($8,933) (7,713) (17,412) (27,146)
Change in timber stumpage and other assets (29,690) (6,179) (1,394)
--------- --------- ---------
Cash used for investing activities (136,356) (95,180) (321,329)
--------- --------- ---------
FINANCING ACTIVITIES
Increase in indebtedness to ITT Corporation -- -- 167,000
Repayments of indebtedness to ITT Corporation -- -- (167,000)
Issuance of debt 267,084 112,435 249,700
Repayments of debt (282,003) (17,698) (51,402)
Issuance of preferred stock -- -- 30,000
Redemption of preferred stock -- -- (30,000)
Cash dividends to ITT Corporation -- (121,840) (17,530)
Cash dividends to shareholders (21,290) -- --
Issuance of Common Shares 155 -- --
(Decrease) increase in minority interest (14,133) (768) 4,486
--------- --------- ---------
Cash (used for) from financing activities (50,187) (27,871) 185,254
--------- --------- ---------
CASH AND SHORT-TERM INVESTMENTS
Increase (decrease) in cash and short-term investments 3,189 (4,742) (3,020)
Balance at beginning of year 5,989 10,731 13,751
--------- --------- ---------
Balance at end of year $ 9,178 $ 5,989 $ 10,731
========= ========= =========
Supplemental disclosures of cash flow information
Cash paid (received) during the year for:
Interest $ 30,996 $ 24,289 $ 22,562
========= ========= =========
Income taxes, net of refunds $ 23,705 $ (18,193) $ 13,835
========= ========= =========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these consolidated statements.
F-6
<PAGE> 9
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands unless otherwise stated)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Rayonier Inc. and
its subsidiaries. Minority interest represents public unitholders' proportionate
share of the partners' capital of Rayonier's consolidated subsidiary, Rayonier
Timberlands, L.P. (RTLP). All significant intercompany balances and transactions
are eliminated. Rayonier's investments in non-controlled companies are included
on the equity basis.
Certain reclassifications have been made to prior years' financial statements to
conform to current year presentation.
Research and Development
Significant costs are incurred each year for research and development programs
expected to contribute to the profitability of future operations. Such costs are
expensed as incurred. Research and development expenditures amounted to $7,477,
$7,302, and $8,267 in 1994, 1993, and 1992, respectively.
Inventories
Inventories are valued at the lower of cost or market. The cost of pulp products
is determined on the first-in, first-out (FIFO) basis. Timber and wood products
are generally valued on an average cost basis. Inventory costs include material,
labor, and manufacturing overhead. Physical counts of inventories are made at
least annually. Potential losses from obsolete, excess, or slow-moving
inventories are provided for currently.
Prepaid Timber Stumpage and Timber Stumpage
Rayonier purchases timber stumpage from RTLP and other private and public owners
of timberlands. The timber stumpage is harvested by Rayonier for use in its log
trading, pulp, and wood products businesses. Timber stumpage is classified as a
current asset, Prepaid Timber Stumpage, based upon the amount of harvest
expected to occur within one year of the balance sheet date. The remainder is
classified as a noncurrent asset, Timber Stumpage.
Timber Cutting Contracts
Rayonier evaluates the realizability of its future timber harvests in the
northwestern and southeastern portions of the United States and in New Zealand
based on the estimated aggregate cost, including the cost of fee timber, timber
stumpage and timber available under cutting contracts, of such harvests and the
market sales values to be realized at the anticipated time of harvesting that
timber. Losses are recorded in the period that a determination is made that the
aggregate harvest costs in a major operating area will not be recoverable.
Timber and Timberlands
The acquisition cost of land, timber, real estate taxes, lease payments, site
preparation, and other costs relating to the planting and growing of timber are
capitalized. Such costs attributed to merchantable timber are charged against
revenue at the time the timber is harvested based on the relationship of
harvested timber to the estimated volume of currently recoverable timber. Timber
and timberlands are stated at the lower of original cost, net of timber cost
depletion, or market value.
Logging Roads
Logging roads, including bridges, are stated at cost, less accumulated
amortization. The costs of roads developed for reforestation activities are
amortized using the straight-line method over their useful economic lives
estimated at 40 years for roads and 20 years for bridges. Road costs associated
with harvestable timber access are charged to a prepaid account and amortized as
the related timber is sold, generally within two years.
F-7
<PAGE> 10
Property, Plant, and Equipment
Property, plant, and equipment additions are recorded at cost which includes
applicable freight, taxes, interest, construction, and installation costs.
Interest capitalized in connection with major construction projects amounted to
$194 and $893 during 1994 and 1992, respectively. No interest costs were
capitalized during 1993. Upon ordinary retirement or sale of property,
accumulated depreciation is charged with the cost of the property removed and
credited with the proceeds of salvage value and no gain or loss is recognized.
Gains and losses with respect to any significant and unusual retirements of
assets are included in operating income.
Depreciation
Pulp manufacturing facilities are depreciated using the units of production
method. Depreciation on other buildings and equipment is provided on a
straight-line basis over the useful economic lives of the assets involved.
Rayonier normally claims the maximum depreciation deduction allowable for tax
purposes.
Earnings (Loss) per Common Share
Earnings (loss) per Common Share through February 28, 1994 and for 1993 and 1992
were computed, after deducting preferred dividends paid in 1992, based on the
number of Rayonier Common Shares that were outstanding on February 28, 1994, the
date of Rayonier's spin-off from ITT Corporation (ITT). Earnings per Common
Share for February 28, 1994 through December 31, 1994 were determined based on
the weighted average number of Common Shares and dilutive Common Shares
outstanding during the period. Common stock equivalents were excluded from the
1993 and 1992 computations due to immateriality. The number of Common Shares
used in earnings (loss) per Common Share computations was 29,697,054 for 1994
and 29,565,392 for 1993 and 1992. See Notes 5 and 10.
Foreign Currency Translation and Exposure
For significant foreign operations, the U.S. dollar is the functional currency.
Monetary assets and liabilities of foreign subsidiaries are translated into U.S.
dollars at current exchange rates. Nonmonetary assets such as inventories and
property, plant, and equipment are translated at historical rates. Income and
expense items are translated at average exchange rates prevailing during the
year, except that inventories and depreciation charged to operations are
translated at historical rates. Exchange gains and losses arising from
translation are included in current income.
Rayonier enters into forward exchange contracts to hedge the short-term impact
of foreign currency fluctuations on operations. The gains and losses on these
contracts are included in income based on current market values. As of December
31, 1994, the Company had no outstanding forward exchange contracts.
2. CHANGES IN ACCOUNTING PRINCIPLES
Statement of Financial Accounting Standards No. 106 - Adopted with a One-Time
Cumulative Adjustment to Net Income
In 1992, Rayonier adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions," using the immediate recognition
method. The standard requires accrual of postretirement health care and life
insurance benefit costs during the years that an employee provides services to
the Company. Accordingly, a cumulative adjustment (through December 31, 1991) of
$31,916 pretax was recognized at January 1, 1992.
Statement of Financial Accounting Standards No. 112 - Adopted with a One-Time
Cumulative Adjustment to Net Income
In 1992, Rayonier adopted SFAS No. 112, "Employers' Accounting for
Postemployment Benefits," using the immediate recognition method. The standard
requires current recognition of costs associated with benefits provided to
former or inactive employees after employment but before retirement. These
postemployment benefits are primarily composed of obligations to provide medical
and life insurance to employees on long-term disability. Accordingly, a
cumulative adjustment (through December 31, 1991) of $1,350 pretax was
recognized at January 1, 1992.
F-8
<PAGE> 11
3. NEW ZEALAND ACQUISITION
During the second quarter of 1992, the Company completed the purchase of forest
assets, primarily Crown forest licenses consisting of long-term rights to
utilize approximately 250,000 acres of plantation forest in New Zealand. These
assets were acquired from the New Zealand government for a cash purchase price
of approximately $197 million. The Company harvests timber for export to Pacific
Rim markets and sale locally in New Zealand.
4. RAYONIER TIMBERLANDS, L.P.
In 1985, Rayonier transferred substantially all of its timberlands business to
Rayonier Timberlands, L.P., a master limited partnership, in exchange for 20
million Class A and 20 million Class B Depositary Units. Thereafter, Rayonier
offered and sold 5.06 million Class A Units (25.3 percent) to the public. The
Partnership Agreement provides that RTLP continues in existence until December
31, 2035, but that the Initial Term of the Partnership will end on December 31,
2000. Class A Units participate principally in the revenues and costs associated
with RTLP's sales of timber through the Initial Term and to a significantly
lesser extent in subsequent periods. RTLP's sales of timber after that date as
well as cash flow associated with land management activities before and after
that date are principally allocable to the Class B units, all of which have been
retained by Rayonier.
RTLP is majority owned by Rayonier and is included in these consolidated
financial statements. The following table summarizes the sales and operating
income of RTLP, for the three years ended December 31, 1994, by region.
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
SALES
Northwest $ 115,261 $ 70,734 $ 81,985
Southeast 51,260 45,313 34,410
--------- --------- ---------
$ 166,521 $ 116,047 $116,395
========= ========= =========
OPERATING INCOME
Northwest $ 94,576 $ 56,249 $ 68,318
Southeast 39,157 33,457 23,608
Corporate and other (1,724) (2,308) (3,279)
--------- --------- ---------
$ 132,009 $ 87,398 $ 88,647
========= ========= =========
</TABLE>
The minority interest in RTLP's earnings was $32,419, $22,508, and $22,702 in
1994, 1993, and 1992, respectively. This reduced Rayonier's net income by
$20,586, $14,293, and $14,643 in 1994, 1993, and 1992, respectively. Effective
January 1, 2001, the minority participation in the earnings of RTLP will be
reduced from approximately 25 percent to approximately 1 percent, and Rayonier's
participation will increase from 75 percent to 99 percent.
5. TRANSACTIONS BETWEEN ITT AND RAYONIER
Rayonier was a wholly owned subsidiary of ITT Corporation (ITT) through February
28, 1994. On February 28, 1994, ITT distributed all of the Common Shares of
Rayonier to the holders of ITT Common and Series N Preferred Stock in a
spin-off. As a result of the spin-off, ITT has no ownership interest in
Rayonier, and Rayonier is an independent public company. Rayonier and ITT
entered into certain agreements governing their relationship subsequent to the
spin-off and providing for the allocation of tax and certain other liabilities
and obligations arising from periods prior to the spin-off.
ITT rendered advice and assistance to Rayonier in general engineering, traffic,
operating, accounting, commercial, financial, and other matters. The fee for
such services was approximately 1/4 of 1 percent of Rayonier's annual sales. The
total fee paid by Rayonier to ITT for these services amounted to $354, $2,326,
and $2,413 in 1994, 1993, and 1992, respectively.
In 1992, Rayonier paid sales commissions of $12,362 to a foreign sales
corporation (FSC) owned by ITT. Dividends paid to ITT were reduced by the
after-tax cost of the foreign sales commissions so as not to impact the
financial condition of Rayonier due to this arrangement. Effective January 1,
1993, ITT transferred ownership of FSC to Rayonier.
On May 14, 1992, Rayonier borrowed $167 million from ITT, the proceeds of which
were utilized as bridge financing in the New Zealand acquisition. On July 28,
1992, all outstanding borrowings from ITT were replaced by bank borrowings.
Interest expense paid to ITT amounted to $2,092 in 1992.
F-9
<PAGE> 12
Rayonier was one of several affiliates participating in the ITT Salaried
Retirement Plan as well as health care and life insurance programs for salaried
employees sponsored by ITT. See Note 11.
6. INCOME TAXES
Prior to the spin-off, Rayonier and its U.S. subsidiaries were included in ITT's
consolidated U.S. federal income tax returns, and Rayonier remitted to ITT its
current income tax liability. Rayonier computed its tax provision in accordance
with tax-sharing arrangements with ITT that, prior to 1993, included the use by
Rayonier of tax benefits realized by ITT as a result of a foreign sales agency
agreement between FSC and Rayonier.
The provision for income taxes was adversely impacted in 1993 by the effects of
tax reform legislation enacted August 10, 1993. This legislation increased the
corporate income tax rate from 34 percent to 35 percent, retroactive to January
1, 1993, and eliminated tax benefits related to log exports for foreign sales
corporations effective in the third quarter. The 1993 provision for income taxes
included a charge of $1,583 as a result of the remeasurement of the Company's
deferred tax liability for the increase in the corporate income tax rate.
U.S. income taxes have not been provided on approximately $13,400 of
undistributed foreign earnings as the Company intends to permanently reinvest
such earnings in expanding foreign operations. Repatriation taxes on such
earnings would not be significant.
Income tax data before the cumulative effect of accounting changes are as
follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Provision (benefit) for income tax
Current
U.S. federal $30,018 $(18,530) $ 1,199
State and local 2,157 (1,216) 117
Foreign (1,715) 2,569 --
------- -------- --------
30,460 (17,177) 1,316
------- -------- --------
Deferred
U.S. federal 6,288 39,713 (47,795)
State and local 318 3,292 (3,268)
Foreign 972 4,604 (619)
------- -------- --------
7,578 47,609 (51,682)
------- -------- --------
$38,038 $ 30,432 $(50,366)
======= ======== ========
</TABLE>
Deferred income tax provision (benefit) represents the tax effect related to
recording revenues and expenses in different periods for financial reporting and
tax return purposes. Deferred tax assets (liabilities) included the following at
December 31, 1994 and 1993:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Accelerated depreciation $(126,663) $(122,544)
Reserves for dispositions
and discontinued operations 16,700 23,212
Other (13,293) (16,346)
--------- ---------
$(123,256) $(115,678)
========= =========
</TABLE>
F-10
<PAGE> 13
A reconciliation of the tax provision (benefit) at the U.S. statutory rate to
the provision (benefit) for income tax as reported is as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Tax provision (benefit) at U.S. statutory rate $37,825 $29,014 $(44,841)
Benefit of foreign sales corporations (608) (1,500) (3,089)
Effect of remeasurement of deferred tax liability -- 1,583 --
State and local taxes, net of federal tax benefit 1,609 1,349 (2,080)
All other, net (788) (14) (356)
------- ------- --------
Provision (benefit) for income tax $38,038 $30,432 $(50,366)
======= ======= ========
</TABLE>
"All other, net" represents tax provision adjustments for permanent differences,
tax credits, foreign tax rates, and other items which are not individually
significant.
7. DISPOSITIONS
In the fourth quarter of 1992, Rayonier provided $180 million, pretax, for the
loss on disposal of assets along with the costs for severance, demolition, and
other closedown items associated with the disposition of the Grays Harbor
Complex. The Company has substantially completed all programs except certain
environmental remediation programs relating to the Grays Harbor Complex.
In 1986, Rayonier discontinued the Southern Wood Piedmont Company (SWP) treated
wood business. SWP is currently active in monitoring, cleanup, and closure
programs at its nine former manufacturing sites. SWP also is in negotiations
with various state and federal agencies regarding the scope and timing for such
programs. The ultimate cost of corrective action and closure programs is
dependent upon the outcome of such negotiations. The cost may also be affected
by new laws, regulations and administrative interpretations, and changes in
environmental control technology.
Although considerable progress on cleanup has been made, there is still
uncertainty as to the timing and amount of future expenditures for completing
programs at all sites. Rayonier currently estimates that expenditures for
environmental remediation at these sites during the 1995-1996 period will
approximate $21 million, pretax.
As of December 31, 1994, Rayonier had reserves of $58,718 for dispositions and
related environmental obligations. The Company believes that any future changes
in estimates, if necessary, will not materially affect its financial condition
or results of operations.
The reserve for dispositions as of December 31, 1994 and 1993, as presented in
the balance sheet, is net of $11,401 for receivables from insurance claims. Such
receivables represent the Company's claim for reimbursements in connection with
property damage settlements relating to SWP's discontinued wood preserving
operations.
F-11
<PAGE> 14
8. DEBT
Rayonier's debt included the following at December 31, 1994 and 1993:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Short-term bank loans $ 84 $180,800
Commercial paper, at interest rates of 5.95% to 6.30% 100,000 --
Variable rate revolving credit agreement - due 1999 67,000 --
7.5% notes - due 2002 110,000 110,000
Medium-term notes due 1998-1999 at interest rates
of 5.84% to 6.16% 16,000 16,000
Medium-term notes due 1995-1997 at variable interest rates 100,000 --
Variable rate term loan agreement -- 100,000
Pollution control and industrial revenue bonds -
due 1995-2015 at interest rates of 4.75% to 8.0% 89,345 90,410
All other 793 931
-------- --------
Total debt 483,222 498,141
Less:
Short-term bank loans 84 180,800
Current maturities 218 1,203
-------- --------
Long-term debt $482,920 $316,138
======== ========
</TABLE>
In April 1994, Rayonier arranged revolving credit agreements with a group of
banks to provide the Company with unsecured credit facilities totaling $300
million. Rayonier subsequently issued $100 million of commercial paper under a
newly implemented commercial paper program backed by the revolving credit
facilities. Rayonier also had borrowings of $67 million outstanding under the
credit facilities as of December 31, 1994, at an average interest rate of 5.92
percent. The proceeds of these borrowings were used to retire short-term bank
loans.
On October 15, 1992, Rayonier issued $110 million of 7.5 percent notes due
October 15, 2002 (the Notes). The Notes were issued pursuant to a registration
statement, filed on Form S-3 effective September 29, 1992, which permitted the
Company to issue up to $250 million in debt securities through public offerings.
The Company used the net proceeds from the sale of the Notes to repay bank debt
which was utilized as bridge financing for the purchase of forest assets in New
Zealand. On April 5, 1993, the Company established a $140 million medium-term
note program pursuant to the registration statement. During April 1993, $16
million of medium-term notes, maturing in 1998 and 1999, were issued under this
program.
On March 29, 1994, the Company filed a shelf registration statement with the
Securities and Exchange Commission on Form S-3 covering $150 million of new debt
securities. The registration statement also served as a post-effective amendment
to the 1992 registration statement, which as amended permits Rayonier to offer
up to $174 million of medium-term notes. On August 18, 1994, Rayonier issued
$100 million of variable rate medium-term notes. The notes mature in 1995, 1996,
and 1997 and bear interest at a variable rate of LIBOR plus 1.5 to 3.5 percent.
As of December 31, 1994, the interest rates on the variable rate medium-term
notes ranged from 5.96 to 6.63 percent. The proceeds of these notes were used to
retire a variable rate term loan.
As of December 31, 1994, Rayonier had $133 million of available borrowings under
its revolving credit facilities. In addition, through currently effective shelf
registration statements filed with the Securities and Exchange Commission,
Rayonier may offer up to $174 million of new public debt securities.
Required repayment of principal for debt is as follows:
<TABLE>
<CAPTION>
<S> <C>
1995 $ 33,302
1996 33,524
1997 36,229
1998 3,342
1999 184,475
2000-2015 192,350
--------
$483,222
========
</TABLE>
F-12
<PAGE> 15
Variable rate medium term notes totaling $33 million are scheduled to mature in
1995. However, the Company intends and has the ability to refinance such debt
with long-term borrowings. Accordingly, the notes have been classified as
long-term on the December 31, 1994 balance sheet.
The carrying value of Rayonier's debt as of December 31, 1994 exceeds its
estimated fair value by approximately $9,500.
The most restrictive long-term debt covenant in effect at December 31, 1994
provides that the ratio of total debt to EBITDA not exceed four to one. As of
December 31, 1994, the ratio was two to one and $328 million of retained
earnings was unrestricted as to the payment of dividends.
9. SHAREHOLDERS' EQUITY
On December 13, 1993, Rayonier changed its state of incorporation from Delaware
to North Carolina by merging into a wholly owned North Carolina subsidiary that
was renamed "ITT Rayonier Incorporated." Under the terms of the merger, the 79
issued and outstanding shares of Common Stock, $100 par value, of the Delaware
corporation (all of which were held by ITT) were reconstituted as 79 Common
Shares of the North Carolina corporation. Rayonier filed Amended and Restated
Articles of Incorporation on December 14, 1993, which increased its authorized
capitalization to 60,000,000 Common Shares and 15,000,000 Preferred Shares. In
addition, on February 17, 1994, Rayonier filed Articles of Amendment changing
its name to "Rayonier Inc." ITT continued to own all of the 79 issued and
outstanding Common Shares of Rayonier until February 28, 1994, when Rayonier
issued additional Common Shares to ITT as a stock dividend sufficient to
increase its total issued and outstanding Common Shares to approximately 29.6
million; all of these Common Shares were then distributed to holders of ITT's
Common Stock and Series N Preferred Stock, in connection with the spin-off. All
share and per share information has been retroactively restated to reflect the
stock dividend similar to a stock split.
On May 15, 1992, Rayonier issued 30,000 shares of its Cumulative Preferred Stock
$77.50 Series A to ITT for $30 million in cash to fund a portion of the cost of
the New Zealand acquisition. The shares were redeemed by the Company on July 28,
1992 with the proceeds of short-term bank borrowings.
Dividends paid by Rayonier on its classes of stock during 1994, 1993, and 1992
were $21,290, $121,840, and $17,530, respectively. The 1993 amount includes a
fourth quarter special dividend of $90 million that was paid to ITT pursuant to
a planned recapitalization program. Dividends in 1992 include $471 paid on the
Series A Preferred Stock.
10. INCENTIVE STOCK PLANS
In the first quarter of 1994, the Company implemented a Substitute Stock Option
Plan under which options to acquire 382,434 Common Shares of Rayonier were
granted in substitution for canceled ITT options. The Rayonier options were
granted at exercise prices of $16.57 to $31.35 per share to maintain the same
economic value to the option holders that they would have had under ITT's stock
option plan.
In 1994, prior to the spin-off, the Board of Directors adopted and ITT, as the
Company's sole shareholder, approved the 1994 Rayonier Incentive Stock Plan (the
1994 Plan). The 1994 Plan provides for the grant of incentive stock options,
nonqualified stock options, stock appreciation rights, performance shares, and
restricted stock for up to one million shares, subject to certain limitations.
The 1994 Plan will expire on December 31, 2003. In 1994, 350,000 options were
granted under this Plan at exercise prices of $28.88 to $31.00 per share. On May
20, 1994, the Company granted contingent performance share awards under the 1994
Plan. A total of 88,500 Common Shares was reserved for this purpose, the
issuance of which is dependent upon the Company's Total Shareholder Return, as
defined, compared to a competitive peer group of 12 companies within the forest
products industry, for the period from May 20, 1994 to December 31, 1996. In
1994, the Company recognized compensation expense of $311 related to the 1994
Plan.
F-13
<PAGE> 16
Stock option activity is summarized as follows:
<TABLE>
<S> <C>
Outstanding - December 31, 1993 --
Granted:
Substitute Stock Option Plan 382,434
1994 Plan 350,000
Exercised (9,415)
Canceled (2,000)
-------
Outstanding - December 31, 1994 721,019
=======
Exercisable - December 31, 1994 191,465
=======
</TABLE>
11. EMPLOYEE BENEFIT PLANS
Pension Plans
Rayonier has pension plans covering substantially all of its employees. The cost
of these plans is borne by Rayonier. Certain plans are subject to union
negotiation. Prior to March 1, 1994, Rayonier also participated in the ITT
Salaried Retirement Plan.
Effective March 1, 1994, Rayonier established the Rayonier Investment and
Savings Plan for Salaried Employees and the Rayonier Salaried Employees
Retirement Plan. These plans, as well as health care, life insurance, and other
employee welfare benefits programs, which represent mirror-image plans to the
various ITT welfare benefit programs previously available to salaried employees,
are being sponsored by Rayonier for the benefit of all salaried active employees
as of March 1, 1994. There was no change in the status of the Rayonier benefit
plans for hourly paid employees.
The following table discloses periodic pension cost for Rayonier plans and total
Rayonier pension expense for the three years ended December 31:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Defined Benefit Plans
Service cost $ 4,152 $ 1,567 $1,668
Interest cost 5,666 5,573 5,707
Return on assets (4,409) (13,138) (5,325)
Net amortization and deferral (2,576) 6,276 (1,451)
------- -------- ------
Net periodic pension cost of Rayonier plans 2,653 278 599
Other Pension Cost
Rayonier portion of ITT Salaried
Retirement Plan 530 2,581 2,938
Multi-employer plans 335 165 --
Defined contribution plans 1,246 1,294 1,329
------- -------- ------
Total pension expense $ 4,764 $ 4,318 $4,866
======= ======== ======
</TABLE>
The following table sets forth the funded status of the Rayonier pension plans
(for hourly paid employees only in 1993), the amounts recognized in the balance
sheets of the Company at December 31, 1994 and 1993 and the principal weighted
average assumptions inherent in their determination:
F-14
<PAGE> 17
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ 69,842 $ 73,017
======== ========
Accumulated benefit obligation $ 73,569 $ 76,979
======== ========
Projected benefit obligation $ 73,993 $ 76,979
Plan assets at fair value 81,597 83,373
-------- --------
Plan assets in excess of
projected benefit obligation 7,604 6,394
Unrecognized net loss 1,676 10,223
Unrecognized past service cost 5,139 4,601
Curtailment effects and termination benefits -- (3,550)
Unrecognized net assets at
January 1, 1994 and 1993 (5,695) (6,382)
-------- --------
Prepaid pension asset recognized
in the balance sheets $ 8,724 $ 11,286
======== ========
Actuarial assumptions:
Discount rate 8.50% 7.50%
Rate of return on invested assets 9.75% 9.75%
Salary increase assumption 5.00% 5.00%
</TABLE>
The table for 1993 reflects the costs of curtailment and special termination
benefits of certain hourly Rayonier pension plans as a result of the closure of
the Grays Harbor Complex. See Note 7. The costs of $3,550 were recorded as part
of the 1992 charge of $180 million related to the Grays Harbor Complex closure,
and were accounted for in accordance with SFAS No. 88, "Employers' Accounting
for Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits."
Postretirement Health and Life
Rayonier provides health care and life insurance benefits for certain eligible
retired employees. Benefits under these plans covering salaried retirees are
maintained through the applicable plans of ITT for employees retiring prior to
March 1, 1994 and, other than for the amount of the expense recorded for the
period, all asset and liability accounts are maintained by ITT. A reserve
balance of $3,924 was transferred from ITT to Rayonier in 1994, to cover the
postretirement benefit obligation for currently active employees as of March 1,
1994. Effective January 1, 1992, Rayonier adopted SFAS No. 106, using the
immediate recognition method for all benefits accumulated to date. Accordingly,
an expense was recorded as of that date of $23,223 for salaried retirees and
$8,693 for hourly paid retirees, which is included in the adjustment to record
the cumulative effect of accounting changes. The Company is not currently
funding this obligation; however, it may pre-fund some portions if it can be
accomplished on a tax-effective basis.
The following table discloses postretirement health care and life insurance
benefits expense (excluding the cumulative catch-up adjustment in 1992) for the
three years ended December 31:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Service cost $ 618 $ 260 $ 239
Interest cost 1,642 766 721
Net amortization and deferral 448 -- --
------- ------- -------
Net periodic expense of Rayonier plans 2,708 1,026 960
Rayonier portion of expense for
ITT Plans for salaried employees 212 1,146 1,653
------- ------- -------
Total postretirement benefits expense $ 2,920 $ 2,172 $ 2,613
======= ======= =======
</TABLE>
F-15
<PAGE> 18
The following table sets forth the status of the postretirement benefit plans
other than pensions (for hourly paid employees only in 1993), the amounts
recognized in Rayonier's balance sheets at December 31, 1994 and 1993 and the
principal weighted average assumptions inherent in their determination:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Accumulated postretirement benefit obligation $ 22,364 $ 10,623
Unrecognized net loss (7,214) (832)
-------- --------
Liability recognized in the balance sheet $ 15,150 $ 9,791
======== ========
Actuarial assumptions:
Discount rate 8.5% 7.5%
Ultimate health care trend rate 6.0% 6.0%
</TABLE>
The assumed rate of future increases in the per capita cost of health care (the
health care trend rate) was 12.1 percent for 1994, decreasing ratably to 6.0
percent in the year 2001. Increasing the table of health care trend rates by one
percent per year would have the effect of increasing the accumulated
postretirement benefit obligation by $2,305 and the annual expense by $264. To
the extent that the actual experience differs from the inherent assumptions, the
effect will be amortized over the average future service of the covered active
employees.
12. LEASES AND RENTALS
As of December 31, 1994, minimum rental commitments under operating leases were
$4,624, $4,368, $4,012, $1,312, and $1,302 for 1995, 1996, 1997, 1998, and 1999,
respectively . For the remaining years, such commitments amounted to $5,166,
aggregating total minimum lease payments of $20,784.
Operating lease commitments at December 31, 1994, include the 1985 sale and
leaseback of Rayonier's Baxley, Georgia, sawmill assets amounting to
approximately $6.2 million, the lease on Rayonier's executive offices, which was
renegotiated and renewed in 1991, of approximately $8.1 million, and the 1992
lease of New Zealand office space of $1.9 million.
Total rental expense for operating leases amounted to $6,068, $5,587, and $6,485
in 1994, 1993, and 1992, respectively.
13. LEGAL PROCEEDINGS
A wholly owned subsidiary of the Company, Southern Wood Piedmont Company (SWP),
which has been a discontinued operation since 1986, was formerly in the wood
preserving business and continues to incur substantial expenditures in cleaning
up its former wood preserving sites. See Note 7. In addition, Rayonier and SWP
are named defendants in seven civil cases pending in the U.S. District Court for
the Southern District of Georgia, arising out of former wood preserving
operations at SWP's plant located in Augusta, Georgia. In general, these cases
seek recovery for property damage or personal injury and, in one case, medical
monitoring costs, based on the alleged exposure to toxic chemicals used by SWP
in its former operations. One case, Ernest Jordan v. Southern Wood Piedmont Co.,
et al., seeks certification as a class action and damages in the amount of $700
million ($200 million in property damage and $500 million in punitive damages).
Counsel for the Company believes that the Company has meritorious defenses in
all these cases. Several previous lawsuits related to the Augusta facility have
been settled for amounts not material to the Company.
Rayonier has been named a Potentially Responsible Party (PRP) or is a defendant
in actions being brought by a PRP in four proceedings instituted by the U.S.
Environmental Protection Agency (EPA) under the Comprehensive Environmental
Response Compensation and Liability Act (CERCLA) or state agencies under
comparable state statutes. In three of these proceedings, Rayonier is considered
a de minimis participant. In the other proceeding, the Company is not a de
minimis participant because of the limited number of PRPs, and the Company
believes that its share of liability for total clean-up costs (currently
estimated to be between $30 million and $39 million) will be less than 9
percent. In each case, Rayonier has established reserves for its estimated
liability. Rayonier has also received requests for information from the EPA in
connection with two other CERCLA sites, but the Company does not currently know
to what extent, if at all, liability under CERCLA will be asserted against
Rayonier with respect to either site.
On November 19, 1994, SWP was named one of six PRPs in the Tennessee Products
Site CERCLA action. SWP was included in the action because of coal tar
derivative deposits found in Chattanooga Creek, which is included as part of the
F-16
<PAGE> 19
Tennessee Products Site. Counsel for the Company believe that the site is
geographically divisible and that SWP is not responsible for any clean-up costs
upstream of its former plant site. Consequently, it is not yet clear what, if
any, remediation will be required of SWP.
There are various other lawsuits pending against or affecting Rayonier and its
subsidiaries, some of which involve claims for substantial sums. Rayonier's
ultimate liability with respect to all pending actions is not expected to
materially impact its consolidated financial position or results of operations.
14. ENVIRONMENTAL MATTERS
Rayonier has become subject to stringent environmental laws and regulations
concerning air emission, water discharges, and waste disposal that, in the
opinion of management, will require substantial expenditures over the next ten
years. Recently proposed Federal environmental regulations governing air and
water discharges may require further expenditures and, if finally enacted in
their proposed form, would prevent the Company from meeting certain product
quality specifications for substantially all of its chemical cellulose products,
and will increase the cost of making its remaining pulp products. Sales of
chemical cellulose products accounted for approximately 29 percent of 1994
sales. While these regulations would have a material adverse effect on
operations if not changed, it will not be possible for Rayonier to determine the
nature or costs of such effect until the regulations are issued in final form.
Over the past four years, the harvest of timber from private lands in the state
of Washington has been restricted as a result of the listing of the northern
spotted owl as a threatened species under the Endangered Species Act (ESA).
These restrictions have caused RTLP to restructure and reschedule some of its
harvest plans. The U.S. Fish and Wildlife Service has developed a proposed rule
under the ESA to redefine protective measures for the northern spotted owl on
private lands. This rule, as currently drafted, would reduce the harvest
restrictions on private lands except within specified special emphasis areas,
where restrictions would be increased. One proposed special emphasis area is on
the Olympic Peninsula, where a significant portion of RTLP's Washington
timberlands is located.
Separately, the state of Washington Forest Practices Board is in the process of
adopting new harvest regulations to protect the northern spotted owl and the
marbled murrelet (also recently listed as a threatened species). The State
Department of Natural Resources draft of this rule also provides for a special
emphasis area to protect the northern spotted owl on the Olympic Peninsula,
which would increase harvest restrictions on the Company's lands.
Rayonier is unable at this time to predict the form in which the federal or
state rules will eventually be adopted. However, if either rule is adopted in
the form proposed by the respective agencies, the result will be some reduction
in the volume of timber available for harvest
15. SEGMENT INFORMATION
Rayonier operates in two major industry segments. Timber and Wood Products
includes the management of timberlands and the trading, merchandising, and
manufacture of logs, timber, and wood products; Specialty Pulp Products accounts
for the production and sale of high-value-added specialty pulps.
Please refer to Item 6 and Item 7, where information regarding business segment
sales, operating income, and business conditions is provided. Additional segment
information for the three years ended December 31 was as follows (millions of
dollars):
<TABLE>
<CAPTION>
Depreciation,
Gross Plant Additions Depletion & Amortization Identifiable Assets
----------------------- ------------------------ ------------------------
1994 1993 1992 1994 1993 1992 1994 1993 1992
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Timber and
Wood Products $ 42 $ 30 $ 23 $ 25 $ 21 $ 17 $ 685 $ 649 $ 591
Specialty Pulp Products 58 41 71 64 56 54 787 794 822
Corporate and other 1 1 1 1 1 1 37 31 51
Dispositions -- -- 2 -- -- 6 2 1 12
------- ------- ------- ------- ------- ------- ------- ------- -------
Total $ 101 $ 72 $ 97 $ 90 $ 78 $ 78 $ 1,511 $ 1,475 $ 1,476
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
F-17
<PAGE> 20
Geographical Operating Information - All Segments (millions of dollars)
<TABLE>
<CAPTION>
Sales Operating Income (Loss) Identifiable Assets
------------------------ -------------------------- ------------------------
1994 1993 1992 1994 1993 1992 1994 1993 1992
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
United States $ 945 $ 839 $ 944 $ 160 $ 103 $ (89) $1,278 $1,248 $1,271
New Zealand 98 93 30 12 27 5 222 226 205
All other 26 4 -- (3) (3) (3) 11 1 --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total $1,069 $ 936 $ 974 $ 169 $ 127 $ (87) $1,511 $1,475 $1,476
====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
Export Sales - All Segments (millions of dollars)
Sales of products produced in various countries for export to other countries
consisted of the following:
<TABLE>
<CAPTION>
Operating Sales
Location Destination 1994 1993 1992
- ----------- ----------- ---- ---- ----
<S> <C> <C> <C> <C>
United States Asia Pacific $266 $282 $303
Western Europe 108 109 146
All other 68 62 63
---- ---- ----
442 453 512
---- ---- ----
New Zealand Asia Pacific 54 67 19
Western Europe -- 4 --
All other 7 2 --
---- ---- ----
61 73 19
---- ---- ----
All other 20 4 --
---- ---- ----
Total $523 $530 $531
==== ==== ====
</TABLE>
16. QUARTERLY RESULTS FOR 1994 AND 1993 (UNAUDITED)
(thousands, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
-------------------------------------------------------------- Total
March 31 June 30 Sept. 30 Dec. 31 Year
--------- --------- ---------- ---------- ----------
1994
----
<S> <C> <C> <C> <C> <C>
Sales $ 257,727 $ 250,770 $ 286,006 $ 274,991 $1,069,494
========= ========= ========== ========== ==========
Operating income $ 51,172 $ 35,231 $ 40,075 $ 42,869 $ 169,347
========= ========= ========== ========== ==========
Net income $ 21,719 $ 14,114 $ 16,405 $ 17,794 $ 70,032
========= ========= ========== ========== ==========
Earnings per Common Share $ .73 $ .48 $ .55 $ .60 $ 2.36
========= ========= ========== ========== ==========
1993
----
Sales $ 216,320 $ 256,575 $ 226,445 $ 236,970 $ 936,310
========= ========= ========== ========== ==========
Operating income $ 36,649 $ 48,750 $ 24,245 $ 17,522 $ 127,166
========= ========= ========== ========== ==========
Net income $ 16,820 $ 24,790 $ 7,733 $ 3,123 $ 52,466
========= ========= ========== ========== ==========
Earnings per Common Share $ .57 $ .84 $ .26 $ .10 $ 1.77
========= ========= ========== ========== ==========
</TABLE>
F-18
<PAGE> 21
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
RAYONIER INC.
By KENNETH P. JANETTE
------------------------------------------
Kenneth P. Janette
April 7, 1995 Vice President and Corporate Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board,
- ---------------------------------- President, Chief Executive
Ronald M. Gross Officer and Director
(Principal Executive Officer)
GERALD J. POLLACK Senior Vice President and April 7, 1995
- ---------------------------------- Chief Financial Officer
Gerald J. Pollack
(Principal Financial Officer)
KENNETH P. JANETTE Vice President and April 7, 1995
- ---------------------------------- Corporate Controller
Kenneth P. Janette
(Principal Accounting Officer)
* Director
- ----------------------------------
William J. Alley
* Director
- ----------------------------------
Rand V. Araskog
* Director
- ----------------------------------
Donald W. Griffin
* Director
- ----------------------------------
Paul G. Kirk, Jr.
* Director
- ----------------------------------
Katherine D. Ortega
* Director
- ----------------------------------
Burnell R. Roberts
Director
- ----------------------------------
Nicholas L. Trivisonno
* Director
- ----------------------------------
Gordon I. Ulmer
*By GERALD J. POLLACK April 7, 1995
------------------------------
Attorney-In-Fact
</TABLE>
