<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------
FORM 11-K
(Mark One):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED].
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
COMMISSION FILE NUMBER 1-6780
RAYONIER INVESTMENT AND SAVINGS PLAN
FOR SALARIED EMPLOYEES
(Full title of the Plan)
RAYONIER INC.
50 North Laura Street
Jacksonville, Florida 32202
(Name and address of Issuer of the securities held pursuant to the Plan)
<PAGE> 2
RAYONIER INVESTMENT AND SAVINGS
PLAN FOR SALARIED EMPLOYEES
PLAN NUMBER 100
EMPLOYER IDENTIFICATION NUMBER 13-2607329
DECEMBER 31, 1999 AND 1998
<PAGE> 3
RAYONIER INVESTMENT AND SAVINGS
PLAN FOR SALARIED EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Certified Public Accountants 1
Statements of Net Assets Available for Benefits
as of December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1999 3
Notes to Financial Statements 4-10
Schedules:
Schedule H, Line 4i: Schedule of Assets Held for Investment Purposes as
of December 31, 1999 11
Schedule H, Line 4j: Schedule of Reportable Transactions for the Year
Ended December 31, 1999 12
Consent of Independent Certified Public Accountants 13
Signatures 14
</TABLE>
i
<PAGE> 4
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Plan Administrator of the Rayonier Investment
and Savings Plan for Salaried Employees:
We have audited the accompanying statements of net assets available for
benefits of the Rayonier Investment and Savings Plan for Salaried Employees
(the Plan) as of December 31, 1999 and 1998, and the related statement of
changes in net assets available for benefits for the year ended December 31,
1999. These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Jacksonville, Florida
June 26, 2000
1
<PAGE> 5
RAYONIER INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------------------------------- ------------------------------------------------
PARTICIPANT NON-PARTICIPANT PARTICIPANT NON-PARTICIPANT
DIRECTED DIRECTED TOTAL DIRECTED DIRECTED TOTAL
------------- --------------- ---------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Receivables:
Accrued income $ 115,929 $ 373 $ 116,302 $ 91,724 $ 282 $ 92,006
Employee contributions - - - - 14,663 14,663
Member contributions 4,098 - 4,098 32,708 - 32,708
------------- --------------- ----------- ------------- --------------- ------------
Total receivables 120,027 373 120,400 124,432 14,945 139,377
Investments, at fair value 69,297,993 29,855,544 99,153,537 63,690,817 28,287,454 91,978,271
------------- --------------- ----------- ------------- --------------- ------------
Total assets 69,418,020 29,855,917 99,273,937 63,815,249 28,302,399 92,117,648
------------- --------------- ----------- ------------- --------------- ------------
LIABILITIES
Accounts payable 30,404 69,403 99,807 24,471 11,758 36,229
Payable to Rayonier 21,482 45,703 67,185 - - -
------------- --------------- ----------- ------------- --------------- ------------
Total liabilities 51,886 115,106 166,992 24,471 11,758 36,229
------------- --------------- ----------- ------------- --------------- ------------
Net assets available for benefits $ 69,366,134 $ 29,740,811 $99,106,945 $ 63,790,778 $ 28,290,641 $ 92,081,419
============= =============== =========== ============= =============== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 6
RAYONIER INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
PARTICIPANT NON-PARTICIPANT
DIRECTED DIRECTED TOTAL
-------------- --------------- --------------
<S> <C> <C> <C>
ADDITIONS
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 6,848,039 $ 1,499,811 $ 8,347,850
Dividends 333,117 793,421 1,126,538
Interest 1,132,438 4,328 1,136,766
-------------- --------------- --------------
8,313,594 2,297,560 10,611,154
-------------- --------------- --------------
Contributions:
Employer 11,558 1,605,905 1,617,463
Members' 4,126,724 - 4,126,724
-------------- --------------- --------------
4,138,282 1,605,905 5,744,187
-------------- --------------- --------------
Total additions 12,451,876 3,903,465 16,355,341
-------------- --------------- --------------
DEDUCTIONS
Deductions from net assets attributed to:
Distributions to members 7,389,510 1,736,963 9,126,473
Administrative expenses 143,272 60,070 203,342
-------------- --------------- --------------
Total deductions 7,532,782 1,797,033 9,329,815
-------------- --------------- --------------
Net increase prior to transfers 4,919,094 2,106,432 7,025,526
Member directed transfers 656,262 (656,262) -
-------------- --------------- --------------
Net increase 5,575,356 1,450,170 7,025,526
Net assets available for plan benefits:
Beginning of period 63,790,778 28,290,641 92,081,419
-------------- --------------- --------------
End of period $ 69,366,134 $ 29,740,811 $ 99,106,945
============== =============== ==============
</TABLE>
The accompanying notes are an integral part of this financial statement.
3
<PAGE> 7
RAYONIER INVESTMENT AND SAVINGS
PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following brief description of the Rayonier Investment and Savings
Plan for Salaried Employees (the Plan) is provided for general information
purposes only. Members should refer to the Plan document for a more complete
description of the Plan's provisions.
(a) General
The Plan is a defined contribution plan covering all eligible full-time
salaried employees of Rayonier Inc. (the Company) upon the first day of any
month following the employee's date of hire. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
(b) Contributions
1. Participant Directed - Each year, members may elect to contribute
up to 16 percent of the Member's Salary, as defined, to the Plan.
Contributions may be made on a before-tax basis, an after-tax
basis or a combination thereof.
2. Non-participant Directed - The Company makes a matching
contribution of 60 percent of the first 6 percent of each Member's
Salary that is contributed to the Plan. Additionally, the Company
contributes one-half of 1 percent of each Member's Salary to the
Members Retirement Account (Retirement Contributions).
Matching Company contributions and Retirement Contributions are
invested entirely in Fund A (discussed below), until a member who has attained
age 55 elects to have all or part of the Company contributions transferred to or
invested in a Fund investing in fixed income investments (Fund C), discussed
below. Member before-tax contributions were limited by the Internal Revenue
Service to $10,000 per year during both 1999 and 1998.
(c) Member Accounts
Each member's account is credited with the member's contribution and
the related Company contribution. Plan earnings and administrative expenses are
allocated to member accounts based upon account balances. Forfeited balances of
terminated members' nonvested accounts are used to reduce future Company
4
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS - (Continued)
contributions. The benefit to which a member is entitled is the benefit that
can be provided from the member's vested account.
(d) Vesting
Members are immediately vested in their contributions plus actual
earnings thereon. Vesting in the member's Company contribution account plus
actual earnings thereon is based on years of service. A member vests 20 percent
after each year of service, with full vesting after five years of service.
(e) Investment Options
Contributions to the Plan are invested in the following funds:
FUND A (RAYONIER COMMON SHARES FUND)
Funds are invested primarily in Rayonier Inc. common stock.
FUND B (BT PYRAMID EQUITY INDEX FUND)
Funds are invested in a commingled fund comprised of a portfolio of
common stocks, all of which are included in the Standard and Poor's 500
Composite Stock Index (S&P 500), with the objective of providing
investment results which will approximate the performance of the S&P
500.
FUND C (BT PYRAMID OPEN END GIC FUND)
Funds are invested in a commingled fund comprised of a diversified
portfolio of guaranteed investment contracts (GICs) issued by banks,
insurance companies and other financial institutions with the objective
of providing a stable rate of return consistent with the preservation
of principal.
FUND D (BT PYRAMID BALANCED FUND)
Funds are invested with the objective of matching the performance of
the S&P 500 and the Lehman Aggregate Bond Index.
Upon enrollment in the Plan, a member may direct contributions in five
percent increments to Fund A, Fund B, Fund C and Fund D. Members may change
their investment options monthly.
(f) Member Loans
Members may borrow from their fund accounts a minimum of $1,000. Loan
amounts may not exceed the lesser of (a) 50 percent of the member's vested
balance, or (b) $50,000 reduced by the member's highest outstanding loan
balance, if any, during the prior one-year period. In no event may a member
borrow from the member's Retirement Account. Loan transactions are treated as
transfers between the investment funds and the loan fund. Loan terms range from
one to five years or up to fifteen years for the purchase of a primary
5
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS - (Continued)
residence. The loans are secured by the balance in the member's account and
bear interest at a rate commensurate with local prevailing rates as determined
periodically by the Plan Committee. The loans bear fixed interest rates that
ranged from 8.75 percent to 10.00 percent at December 31, 1999 and from 9.50
percent to 11.50 percent at December 31, 1998. Principal and interest are paid
ratably through monthly payroll deductions.
(g) Payment of Benefits and Withdrawals
Plan benefits are payable to participants at the time of termination or
retirement (including early retirement), in the case of becoming permanently and
totally disabled, or to their beneficiary in the event of death, based on the
fully vested balance of their accounts. Alternatively, upon termination, a
member whose vested account balance exceeds $5,000 may elect to defer
distribution until March 31 in the year following the member's attainment of age
70-1/2. Provided the member's vested account balance exceeds $5,000, the member
may elect to receive benefit payments in annual installments, generally over a
period not to exceed twenty years.
Withdrawals may be made of any amount in the individual's after tax account in
excess of a prescribed minimum. Distributions from before tax accounts are
prohibited before attaining the age of 59-1/2 except in case of death, permanent
and total disability or financial hardship. Existence of financial hardship will
be determined based on Internal Revenue Service criteria.
(h) Forfeited Accounts
Forfeited nonvested accounts are used to reduce future employer
contributions. In 1999, employer contributions were reduced by $79,825 from
forfeited nonvested accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Accounting
The accompanying financial statements of the Plan are prepared under
the accrual method of accounting.
(b) Use of Estimates
The preparation of the financial statements requires the use of certain
estimates in determining the reported amount of assets and liabilities at the
date of the financial statements and the reported amount of contributions,
earnings, distributions and expenses during the reporting period. Actual results
could differ from those estimates.
6
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS - (Continued)
(c) Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Investment in Rayonier
Inc. common stock is based upon the quoted market price. Member loans receivable
are valued at cost which approximates fair value.
Certain Plan investments are shares of commingled investment funds. The
fair value of such shares is determined by the trustee (Note 3) based upon the
current market values of the underlying assets of the trust. The Company has
received a copy of the financial statements of each of the commingled investment
funds. Statements of net assets as of December 31, 1999 for the BT Pyramid
Directed Cash Fund, the BT Pyramid Equity Index Fund, the BT Pyramid Open End
GIC Fund and the BT Pyramid Balanced Fund are filed directly with the Department
of Labor.
Purchases and sales of securities are recorded on a trade-date basis.
The cost of securities sold is determined on the average cost basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
(d) Payment of Benefits
Benefits are recorded when paid.
(e) Adoption of Statement of Position (SoP) 99-3
The Plan adopted SoP 99-3, Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters, for these
Plan financial statements, which was effective for plan years ending after
December 15, 1999. This SoP simplifies disclosures for certain investments of
the Plan.
(f) Reclassifications
Certain reclassifications of the prior year amounts have been made to
conform with the current year presentation.
3. INVESTMENTS
The following presents both participant and non-participant directed
investments of the Plan's net assets.
7
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS - (Continued)
<TABLE>
<CAPTION>
December 31,
1999 1998
----------- -----------
<S> <C> <C>
Rayonier Inc. common stock (non-participant directed) $29,536,929 $28,000,161
Rayonier Inc. common stock (participant directed) 13,688,265 12,405,388
BT Pyramid Equity Index Fund 30,804,381 25,946,675
BT Pyramid Open End GIC Fund 15,927,512 16,031,050
BT Pyramid Balanced Fund 7,251,273 7,509,777
BT Pyramid Directed Account Cash Fund (non-participant
directed) 318,615 287,293
BT Pyramid Directed Account Cash Fund (participant
directed) 147,159 128,500
BT Pyramid Discretionary Cash Fund - 119,000
Member loans receivable 1,479,403 1,550,427
----------- -----------
$99,153,537 $91,978,271
=========== ===========
</TABLE>
4. GUARANTEED INVESTMENT CONTRACTS
Certain GICs held in the BT Pyramid Open End GIC Fund are synthetic;
that is, the Fund owns certain fixed income marketable securities, and a third
party provides a "wrapper" that guarantees a fixed rate of return and provides
benefit responsiveness. The BT Pyramid Open End GIC Fund is credited with
earnings on the underlying investments and charged for participant withdrawals
and administrative expenses. The contracts are included in the financial
statements at contract value. Contract value represents contributions made
under the contract, plus earnings, less participant withdrawals and
administrative expenses. Participants may ordinarily direct the withdrawal or
transfer of all or a portion of their investment at contract value.
There are no reserves against contract value for credit risk of the
contract issuer or otherwise. The crediting interest rate may be fixed or
variable, as specified under the terms of the agreement. The average yield and
crediting interest rates were 6.26 percent for the year ended December 31, 1999.
5. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of commingled investment funds
managed by Bankers Trust Company (Bankers Trust). Bankers Trust is the trustee
as defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions. Fees paid to Bankers Trust for investment
management services related to the Plan amounted to $95,956 in 1999. In
addition, certain Plan investments are in Rayonier Inc. common stock. As
Rayonier Inc. is the Plan Sponsor, these transactions qualify as
party-in-interest transactions.
8
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS - (Continued)
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, members will become 100 percent vested in their accounts.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan
benefits per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1999 1998
------------------ ------------------
<S> <C> <C>
Net assets available for plan benefits per the
financial statements $ 99,106,945 $ 92,081,419
Amounts allocated to withdrawing members (1,133,665) (1,409,126)
------------------ ------------------
Net assets available for plan benefits per Form 5500 $ 97,973,280 $ 90,672,293
================== ==================
</TABLE>
The following is a reconciliation of benefits paid to members according
to the financial statements to Form 5500:
<TABLE>
<CAPTION>
Year ended
December 31, 1999
-----------------
<S> <C>
Benefits paid to members per the financial statements $ 9,126,473
Add: Amounts allocated to withdrawing
members - current year 1,133,665
Less: Amounts allocated to withdrawing
members - prior year (1,409,126)
-----------------
Benefits paid to members per Form 5500 $ 8,851,012
=================
</TABLE>
Amounts allocated to withdrawing members are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31, 1999 but yet not paid as of that date.
8. TAX STATUS
The Internal Revenue Service has determined and informed the Plan
Administrator by a letter dated December 27, 1995, that the Plan is designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The Plan
has been amended since receiving the determination letter. However, the Plan
Administrator and the Plan's tax counsel believe that the Plan is currently
designed and is being operated in compliance with the applicable requirements of
the IRC.
9
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS - (Continued)
9. ADMINISTRATIVE EXPENSES
An annual charge to the Plan of up to 0.25 percent of the market value
of the assets held by the Plan is charged to satisfy expenses incurred in
conjunction with Plan administration, including, but not limited to, investment
management, trustee, record-keeping and audit fees. The Company pays the balance
of Plan expenses in excess of the maximum charge to the Plan.
10
<PAGE> 14
SCHEDULE H, Line 4i
RAYONIER INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
SCHEDULE H, LINE 4i: SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
PLAN NUMBER 100
EMPLOYER IDENTIFICATION NUMBER 13-2607329
<TABLE>
<CAPTION>
CURRENT
UNITS/SHARES DESCRIPTION COST VALUE
-------------- ------------------------------------------ -------------- --------------
<S> <C> <C> <C>
465,774 * BT Pyramid Directed Account Cash Fund $ 465,774 $ 465,774
8,718 * BT Pyramid Equity Index Fund 13,758,711 30,804,381
15,927,512 * BT Pyramid Open End GIC Fund 15,927,512 15,927,512
26,929 * BT Pyramid Balanced Fund 5,606,313 7,251,273
894,700 * Rayonier Inc. Common Stock 32,282,320 43,225,194
1,479,403 ** Member Loans receivable 1,479,403 1,479,403
-------------- --------------
$ 69,520,033 $ 99,153,537
============== ==============
</TABLE>
* Denotes Party-In-Interest transaction.
** The loans bear fixed interest rates that range from 8.75 percent to 10.00
percent.
11
<PAGE> 15
SCHEDULE H, Line 4j
RAYONIER INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
SCHEDULE H, LINE 4j: SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
PLAN NUMBER 100
EMPLOYER IDENTIFICATION NUMBER 13-2607329
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSET ON NET
IDENTITY OF PURCHASE SELLING COST OF TRANSACTION GAIN
PARTY DESCRIPTION OF TRANSACTION PRICE PRICE ASSET DATE (LOSS)
----------------------- ---------------------------- ------------- ------- -------------- ----------------- ------
<S> <C> <C> <C> <C> <C> <C>
Series of Transactions:
Bankers Trust Company Purchase of 110,760 shares of
Rayonier Inc. common stock $ 4,783,243 $ - $ 4,783,243 $ 4,783,243 $ -
============= ======= ============== ================= ======
</TABLE>
12
<PAGE> 16
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K, into Rayonier Inc.'s
previously filed Registration Statement on Form S-8 (File No. 33-65291).
ARTHUR ANDERSEN LLP
Jacksonville, Florida
June 28, 2000
13
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Investment and Savings Plan Committee for the Rayonier Investment and
Savings Plan for Salaried Employees has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized.
<TABLE>
<S> <C>
Rayonier Investment and Savings Plan for Salaried Employees
-----------------------------------------------------------
(Name of Plan)
Date June 28, 2000 By JOHN P. O'GRADY
---------------- -----------------------------------------------------
John P. O'Grady
Plan Administrator
</TABLE>
14
