<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Number l3-2607329
50 North Laura Street, Jacksonville, FL 32202
(Principal Executive Office)
Telephone Number: (904) 357-9100
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during
the preceding l2 months and (2) has been subject to such filing requirements for
the past 90 days.
YES (X) NO ( )
As of November 1, 2000, there were outstanding 27,098,590 common shares of the
Registrant.
<PAGE> 2
RAYONIER INC.
FORM 10-Q
SEPTEMBER 30, 2000
TABLE OF CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
Item l. Financial Statements
Statements of Consolidated Income for the
Three Months and Nine Months Ended September
30, 2000 and 1999 1
Consolidated Balance Sheets as of September 30, 2000
and December 3l, 1999 2
Statements of Consolidated Cash Flows for the
Nine Months Ended September 30, 2000 and 1999 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 5
Item 3. Selected Operating Data 9
Selected Supplemental Financial Data 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signature 11
Exhibit Index 12
i
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements reflect, in the opinion of Rayonier
Inc. and subsidiaries (Rayonier or the Company), all adjustments (which include
only normal recurring adjustments) necessary for a fair presentation of the
results of operations, the financial position and the cash flows for the periods
presented. For a full description of accounting policies, please refer to the
Notes to Consolidated Financial Statements in the l999 Annual Report on Form
l0-K.
RAYONIER INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(UNAUDITED)
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
SALES .................................. $ 251,058 $ 255,453 $ 823,765 $ 739,872
--------- --------- --------- ---------
Costs and expenses
Cost of sales ....................... 209,444 217,950 661,506 621,829
Selling and general expenses ........ 6,845 6,771 26,197 26,021
Other operating expense (income), net 1,204 (1,381) 3,725 (3,286)
--------- --------- --------- ---------
217,493 223,340 691,428 644,564
--------- --------- --------- ---------
OPERATING INCOME ....................... 33,565 32,113 132,337 95,308
Interest expense ....................... (20,586) (7,306) (64,988) (22,693)
Miscellaneous (expense) income, net .... (2,378) 114 (3,001) 595
Gains from sale of assets .............. -- -- 23,147 --
--------- --------- --------- ---------
Income before income taxes ............. 10,601 24,921 87,495 73,210
Income tax benefit (expense) ........... 1,504 (7,787) (22,486) (23,869)
--------- --------- --------- ---------
NET INCOME ............................. $ 12,105 $ 17,134 $ 65,009 $ 49,341
========= ========= ========= =========
EARNINGS PER COMMON SHARE
Basic ............................ $ 0.45 $ 0.62 $ 2.38 $ 1.78
========= ========= ========= =========
Diluted .......................... $ 0.44 $ 0.61 $ 2.34 $ 1.75
========= ========= ========= =========
</TABLE>
1
<PAGE> 4
RAYONIER INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(THOUSANDS OF DOLLARS)
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------- ---------
<S> <C> <C>
CURRENT ASSETS
Cash and short-term investments $ 4,627 $ 12,265
Accounts receivable, less allowance for doubtful
accounts of $4,773 and $4,859 104,942 103,535
Inventories
Finished goods 53,489 52,984
Work in process 11,019 12,478
Raw materials 12,805 17,947
Manufacturing and maintenance supplies 24,185 21,670
---------- ----------
Total inventories 101,498 105,079
Timber purchase agreements 32,841 30,477
Other current assets 12,035 11,107
Deferred income taxes 4,437 9,143
---------- ----------
Total current assets 260,380 271,606
---------- ----------
OTHER ASSETS 62,158 77,094
TIMBER PURCHASE AGREEMENTS 9,770 7,816
TIMBER, FORESTLANDS AND LOGGING ROADS,
NET OF DEPLETION AND AMORTIZATION 1,208,112 1,247,547
PROPERTY, PLANT AND EQUIPMENT, NET
Land, buildings, machinery and equipment 1,352,898 1,333,789
Less accumulated depreciation 713,112 657,625
---------- ----------
639,786 676,164
---------- ----------
TOTAL ASSETS $2,180,206 $2,280,227
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 66,006 $ 74,035
Bank loans and current maturities 2,216 3,248
Accrued taxes 17,478 15,148
Accrued payroll and benefits 26,064 22,405
Accrued interest 25,296 11,160
Other current liabilities 39,218 48,895
Current reserves for dispositions and discontinued operations 19,411 18,980
---------- ----------
Total current liabilities 195,689 193,871
DEFERRED INCOME TAXES 128,923 123,458
LONG-TERM DEBT 1,007,070 1,132,930
NON-CURRENT RESERVES FOR DISPOSITIONS
AND DISCONTINUED OPERATIONS 142,193 149,551
OTHER NON-CURRENT LIABILITIES 33,581 27,517
SHAREHOLDERS' EQUITY
Common shares, 60,000,000 shares authorized,
27,030,040 and 27,407,094 shares issued and outstanding 44,807 60,518
Retained earnings 627,943 592,382
---------- ----------
672,750 652,900
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,180,206 $2,280,227
========== ==========
</TABLE>
2
<PAGE> 5
RAYONIER INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
2000 1999
--------- ---------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 65,009 $ 49,341
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation, depletion and amortization 116,804 77,313
Deferred income taxes 7,634 7,772
Gains from sale of assets (23,147) --
Non-cash cost of land sales 3,621 4,017
Increase (decrease) in other non-current liabilities 6,064 (411)
Change in accounts receivable, inventories
and accounts payable (9,476) (5,796)
(Increase) decrease in current timber purchase agreements (2,364) 4,641
(Increase) decrease in other current assets (928) 1,936
Increase in accrued liabilities 10,448 8,480
--------- ---------
CASH PROVIDED BY OPERATING ACTIVITIES 173,665 147,293
--------- ---------
INVESTING ACTIVITIES
Capital expenditures (63,111) (63,802)
Sales, retirements and reclassifications of property, plant and
equipment, net (4,136) (442)
Expenditures for dispositions and discontinued operations,
net of tax benefits of $2,537 and $4,234 (4,390) (6,905)
Proceeds from sale of assets, net of cash costs 49,403 --
Change in timber purchase agreements and other assets 12,982 10,078
--------- ---------
CASH USED FOR INVESTING ACTIVITIES (9,252) (61,071)
--------- ---------
FINANCING ACTIVITIES
Issuance of debt 70,901 116,879
Repayments of debt (197,793) (167,775)
Dividends paid (29,394) (25,852)
Repurchase of common shares (17,624) (16,438)
Issuance of common shares 1,859 3,995
--------- ---------
CASH USED FOR FINANCING ACTIVITIES (172,051) (89,191)
--------- ---------
CASH AND SHORT-TERM INVESTMENTS
Decrease in cash and short-term investments (7,638) (2,969)
Balance at beginning of period 12,265 6,635
--------- ---------
Balance at end of period $ 4,627 $ 3,666
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 50,852 $ 18,188
========= =========
Income taxes $ 13,621 $ 12,094
========= =========
</TABLE>
3
<PAGE> 6
RAYONIER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
1. EARNINGS PER COMMON SHARE
The following table provides details of the calculation of basic and
diluted earnings per common share in accordance with Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share," for the three
months and nine months ended September 30, 2000 and 1999.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 12,105 $ 17,134 $ 65,009 $ 49,341
=========== =========== =========== ===========
Shares used for determining basic earnings
per common share 27,134,430 27,698,598 27,282,984 27,763,251
Dilutive effect of
Stock options 140,264 270,402 177,394 269,705
Contingent shares 360,000 240,000 360,000 240,000
----------- ----------- ----------- -----------
Shares used for determining diluted earnings
per common share 27,634,694 28,209,000 27,820,378 28,272,956
=========== =========== =========== ===========
Basic earnings per common share $ 0.45 $ 0.62 $ 2.38 $ 1.78
=========== =========== =========== ===========
Diluted earnings per common share $ 0.44 $ 0.61 $ 2.34 $ 1.75
=========== =========== =========== ===========
</TABLE>
2. GAINS FROM SALE OF ASSETS
From time to time, Rayonier opportunistically sells non-strategic assets to
monetize portions of its asset base. In March 2000, Rayonier sold
approximately 57,000 acres of Southeastern U.S. forestland to various third
parties for $49.6 million, resulting in a pre-tax gain of $23.1 million
($14.4 million after tax, or $0.51 per diluted common share). The proceeds
of these sales were used to reduce debt.
3. INCOME TAXES
During the third quarter of 2000, the Company reduced its 2000 income tax
provision by $2.6 million upon resolution of outstanding tax issues.
4. RECLASSIFICATIONS
Certain reclassifications of the prior year amounts have been made to
conform with the current year presentation.
4
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SEGMENT INFORMATION
Rayonier operates in two major business segments, Timber and Wood Products and
Specialty Pulp Products. The Timber and Wood Products segment includes two
reportable business units, Forest Resources and Trading and Wood Products.
Chemical Cellulose and Fluff and Specialty Paper Pulps are product lines within
the Specialty Pulp Products segment. The Company renamed its Specialty Pulp
Products segment, the Performance Fibers group, as detailed in its press release
dated November 9, 2000. This change will be reflected in future filings.
The amounts and relative contributions to sales and operating income
attributable to each of Rayonier's reportable business units for the three
months and nine months ended September 30, 2000 and 1999 were as follows
(thousands of dollars):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
SALES
Timber and Wood Products
Forest Resources and Trading $ 94,293 $ 111,255 $ 335,608 $ 330,399
Wood Products 22,940 31,995 86,239 89,409
--------- --------- --------- ---------
Total Timber and Wood Products 117,233 143,250 421,847 419,808
--------- --------- --------- ---------
Specialty Pulp Products
Chemical Cellulose 71,380 67,072 220,232 199,857
Fluff and Specialty Paper Pulps 62,445 45,442 181,878 120,767
--------- --------- --------- ---------
Total Specialty Pulp Products 133,825 112,514 402,110 320,624
--------- --------- --------- ---------
Intersegment Eliminations -- (311) (192) (560)
--------- --------- --------- ---------
Total Sales $ 251,058 $ 255,453 $ 823,765 $ 739,872
========= ========= ========= =========
OPERATING INCOME (LOSS)
Timber and Wood Products
Forest Resources and Trading $ 19,947 $ 20,517 $ 94,461 $ 78,926
Wood Products (7,117) 1,745 (11,250) 2,808
--------- --------- --------- ---------
Total Timber and Wood Products 12,830 22,262 83,211 81,734
Specialty Pulp Products 22,853 10,394 61,362 22,416
Corporate and Other (2,118) (543) (12,236) (8,842)
--------- --------- --------- ---------
Total Operating Income $ 33,565 $ 32,113 $ 132,337 $ 95,308
========= ========= ========= =========
</TABLE>
RESULTS OF OPERATIONS
SALES AND OPERATING INCOME (LOSS)
Sales for the third quarter of 2000 were $251.1 million, $4.4 million below
prior year, primarily due to lower log and wood products trading activity and
weakness in lumber markets, partially offset by stronger Specialty Pulp Products
markets and additional Southeast timber volume related to the 1999 acquisition.
Sales for the nine months ended September 30, 2000 of $823.8 million were $83.9
million higher than the prior year, due to increases in the Specialty Pulp
Products segment, primarily the result of higher volume and prices, as well as
increases in the Timber and Wood Products segment, primarily the result of
increased timber harvesting in both the Southeast U.S. and the Northwest U.S.,
and higher Southeast U.S. land sales partially offset by weakness in lumber
markets.
5
<PAGE> 8
Operating income for the third quarter of 2000 of $33.6 million was $1.5 million
above prior year, and operating income for the nine months ended September 30,
2000 of $132.3 million was $37.0 million above prior year. Specialty Pulp
Products operating results for both periods increased due to higher volumes,
higher prices and lower costs. Timber and Wood Products results declined in the
third quarter compared to the prior year due primarily to lower lumber pricing
and a lower harvest in the Northwest U.S. partially due to an unusually strong
first quarter 2000 harvest. However, for the nine months ended September 30,
2000, increased timber volume, primarily from the unusually strong Northwest
U.S. harvest during first quarter 2000, more than offset the impact of lower
lumber prices.
TIMBER AND WOOD PRODUCTS
Timber and Wood Products sales for the third quarter of 2000 were $117.2
million, $26.0 million below prior year, although sales for the nine months
ended September 30, 2000 at $421.8 million were $2.0 million above prior year.
Operating income for the third quarter of 2000 of $12.8 million was $9.4 million
below prior year. Operating income for the nine months ended September 30, 2000,
however, at $83.2 million was $1.5 million above prior year.
FOREST RESOURCES AND TRADING
Forest Resources and Trading sales for the third quarter of 2000 were $94.3
million, $17.0 million below prior year. Higher Southeast U.S. timber volumes
were more than offset by lower Northwest U.S. timber volumes, which had been
unusually strong in first quarter 2000, lower Northwest U.S. and Southeast
U.S. timber prices and lower log trading activity. For the nine months ended
September 30, 2000, sales were $335.6 million, $5.2 million above prior year.
The sales improvement was the result of increased volumes in the Southeast
U.S. resulting from the Smurfit forestlands acquisition, and unusually strong
first quarter 2000 Northwest U.S. timber volumes. These improvements in sales
were partially offset by lower timber prices in the Southeast U.S.
Operating income for the third quarter of 2000 was $19.9 million, $0.6
million below prior year, as increased timber volume and prices in the
Southeast U.S. and New Zealand were more than offset by lower timber volume
and prices in the Northwest U.S and lower timber prices in the Southeast U.S.
For the nine months ended September 30, 2000, operating income was $94.5
million, $15.5 million above prior year. The increase was primarily a result
of the unusually strong Northwest U.S. timber sales activity in first quarter
2000, and higher Southeast U.S. land sales.
WOOD PRODUCTS
Wood Products sales for the third quarter of 2000 were $22.9 million, $9.1
million below prior year, and sales for the nine months ended September 30,
2000 of $86.2 million were $3.2 million below prior year. Operating losses of
$7.1 million and $11.3 million for the third quarter of 2000 and nine months
ended September 30, 2000, respectively, were $8.9 million and $14.1 million
below prior year results, respectively. The lower operating income is
attributable to lower lumber pricing and higher logs costs, partially offset
by continued operating and price improvements at the New Zealand
medium-density-fiberboard (MDF) plant.
SPECIALTY PULP PRODUCTS
Sales of Specialty Pulp Products for the third quarter of 2000 were $133.8
million, $21.3 million above prior year, due to stronger fluff pulp pricing and
higher pulp volumes, partially offset by lower chemical cellulose prices. For
the nine months ended September 30, 2000, sales were $402.1 million, $81.5
million above prior year. Operating income of $22.9 million and $61.4 million
for the third quarter of 2000 and nine months ended September 30, 2000,
respectively, were $12.5 million and $38.9 million above prior year. Third
quarter 2000 fluff and specialty paper pulp prices were 28.7 percent higher than
prior year, while overall volumes for chemical cellulose, and fluff and
specialty paper pulps were 7.9 percent higher. For the nine months ended
September 30, 2000, fluff and specialty paper pulp prices were 26 percent
higher, while chemical cellulose and fluff and specialty paper pulp volumes
increased 16.1 percent.
CORPORATE AND OTHER
Corporate and other costs for the third quarter of 2000 were $2.1 million, $1.6
million above prior year, due to increased incentive compensation costs.
Additionally, corporate and other expenses for the nine months ended September
30, 2000 of $12.2 million were $3.4 million above prior year, principally as a
result of costs associated with the headquarters relocation from Stamford, CT to
Jacksonville, FL.
6
<PAGE> 9
INTEREST EXPENSE
Interest expense of $20.6 million and $65.0 million for the third quarter of
2000 and the nine months ended September 30, 2000, respectively, were $13.3
million and $42.3 million above prior year, reflecting higher debt levels
associated with the Smurfit forestland acquisition and slightly higher interest
rates.
MISCELLANEOUS (EXPENSE) INCOME, NET
Miscellaneous (expense) income for the third quarter of 2000 was $(2.4) million
compared to $0.1 million in the prior year, and $(3.0) million for the nine
months ended September 30, 2000 compared to $0.6 million for the nine months
ended September 30, 1999. The increased expense for both the third quarter of
2000 and the nine months ended September 30, 2000 reflect losses on the
mark-to-market of foreign exchange forward contracts.
GAINS FROM SALES OF ASSETS
In March 2000, Rayonier sold approximately 57,000 acres of non-strategic
Southeast U.S. forestland to various third parties for $49.6 million, resulting
in a pre-tax gain of $23.1 million ($14.4 million after tax, or $0.51 per
diluted common share). The proceeds of these sales were used to reduce debt.
INCOME TAXES
During the third quarter of 2000, the Company reduced its 2000 income tax
provision by $2.6 million upon resolution of outstanding tax issues, which
resulted in an income tax benefit of $1.5 million for the quarter. The effective
tax rate for the nine months ended September 30, 2000 was 25.7 percent. The
effective tax rates for the corresponding periods in the prior year were 31.2
percent and 32.6 percent. The Company's effective tax rate continues to be below
U.S. statutory rates, resulting from the lower tax rates in effect for foreign
subsidiaries and various tax credits.
NET INCOME
Net income for the third quarter of 2000 was $12.1 million, or $0.44 per diluted
common share, compared to $17.1 million, or $0.61 per diluted common share, for
the third quarter of 1999. Net income for the nine months ended September 30,
2000 was $65.0 million, or $2.34 per diluted common share, compared to $49.3
million, or $1.75 per diluted common share, for the nine months ended September
30, 1999. Net income for the nine months ended September 30, 2000 included $14.4
million, or $0.51 per diluted common share, reflecting gains from the sale of
non-strategic forestland.
In its press release dated October 23, 2000, the Company said specialty pulp
markets and pricing remain firm, wood products markets continue to languish.
However, seasonal increases in timber volumes should result in fourth quarter
earnings that are higher than the third quarter but lower than fourth quarter
1999.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow provided by operating activities of $173.7 million for the nine months
ended September 30, 2000 increased $26.4 million from 1999, primarily as a
result of improvements in net income. Cash flow used for investing activities
for the nine months ended September 30, 2000 was $9.3 million, decreased $51.7
million from 1999, primarily the result of capital expenditures being mostly
offset by monetizing certain non-strategic forestlands. EBITDA (defined as
earnings from continuing operations before significant non-recurring items,
provision for dispositions, interest expense, income taxes, depreciation,
depletion and amortization and the non-cash cost of land sales) for the three
months and nine months ended September 30, 2000 was $77.0 million and $249.8
million, respectively, $16.6 million and $72.5 million higher than the prior
year. During the nine months ended September 30, 2000, cash from operating
activities and the proceeds from the sale of non-strategic assets were used to
finance capital expenditures of $63.1 million, pay dividends of $29.4 million,
repurchase common shares for $17.6 million, and reduce debt by $126.9 million.
The Company repurchased 204,500 of its shares during the third quarter of 2000
at an average cost of $40.41 for a total of $8.3 million, and 433,000 shares
during the nine months ended September 30, 2000 at an average cost of $40.70 for
a total of $17.6 million. These activities completed a one million share
repurchase program authorized in October 1998. During the third quarter of 1999
and the nine months ended September 30, 1999, the Company repurchased 249,000
and 373,300 shares, at average costs
7
<PAGE> 10
of $43.53 and $44.03 per share for $10.8 million and $16.4 million,
respectively. On October 20, 2000 the Company's Board of Directors authorized
another share repurchase program of up to one million shares.
At September 30, 2000, debt was $1,009.3 million and the debt-to-capital ratio
was 60.0 percent, compared to debt of $1,136.2 million and a debt-to-capital
ratio of 63.5 percent at December 31, 1999. Excluding U.S. timberland external
debt, corporate debt was $286.8 million, a reduction of $132.4 million from
December 31, 1999 and $152.2 million from September 30, 1999. The Company has
unsecured credit facilities totaling $300 million, which were used as support
for $35 million of outstanding commercial paper. As of September 30, 2000,
Rayonier (excluding U.S. timberland revolving credit facilities) had $265
million available under its revolving credit facilities.
In connection with the financing of the Smurfit forestland acquisition, Rayonier
Timberlands Operating Company, L.P. (RTOC), a wholly-owned limited partnership,
issued notes totaling $485 million, and entered into an agreement with a group
of banks that provided RTOC with an unsecured term loan of $200 million and
revolving credit facilities totaling $75 million, which expire in 2004. As of
September 30, 2000 and December 31, 1999, RTOC's outstanding external debt was
$722.5 million and $717.0 million, respectively. RTOC had $40 million of
available borrowings under its revolving credit facilities as of September 30,
2000.
In addition, the Company has on file with the Securities and Exchange Commission
shelf registration statements to offer $150 million of new public debt
securities. The Company believes that internally generated funds, combined with
available external financing, will enable Rayonier to fund capital expenditures,
share repurchases, working capital and other liquidity needs for the foreseeable
future.
SAFE HARBOR
Comments about market trends, anticipated volumes and earnings and other future
activities are forward-looking and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Changes in
the following important factors, among others, could cause actual results to
differ materially from those expressed in the forward-looking statements:
changes in global market trends; interest rate and currency movements;
fluctuations in demand for specialty chemical cellulose and fluff pulps, export
and domestic logs, and wood products; the impact of such market factors on the
Company's timber sales in the U.S. and New Zealand; adverse weather conditions;
production costs for wood products and for specialty pulps, particularly for raw
materials such as wood and chemicals; and governmental policies and regulations
affecting the environment, import and export controls, and taxes.
8
<PAGE> 11
ITEM 3. SELECTED OPERATING DATA
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
TIMBER AND WOOD PRODUCTS
Log trading sales volume
North America, in millions of board feet 42 57 166 132
New Zealand, in thousands of cubic meters 348 306 897 897
Other, in thousands of cubic meters 41 157 246 429
Timber sales volume
Northwest U.S., in millions of board feet 26 33 180 165
Southeast U.S., in thousands of short green tons 1,237 664 3,373 1,795
New Zealand, in thousands of cubic meters 370 324 912 915
Lumber sales volume, in millions of board feet 51 65 186 189
Medium-density fiberboard sales volume,
in thousands of cubic meters 37 33 113 91
Intercompany timber sales volume
Northwest U.S., in millions of board feet 6 3 45 21
Southeast U.S., in thousands of short green tons 4 15 27 26
New Zealand, in thousands of cubic meters 177 159 440 428
SPECIALTY PULP PRODUCTS
Pulp sales volume
Chemical cellulose, in thousands of metric tons 87 80 265 235
Fluff and specialty paper pulp, in thousands of metric tons 91 85 276 231
Production as a percent of capacity 103.4% 95.4% 102.9% 94.7%
</TABLE>
9
<PAGE> 12
SELECTED SUPPLEMENTAL FINANCIAL DATA (thousands of dollars, except per share
data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
GEOGRAPHICAL DATA (NON-U.S.)
Sales
New Zealand $ 25,388 $ 20,678 $ 68,241 $ 60,483
Other 5,689 9,662 29,686 30,745
--------- --------- --------- ---------
Total $ 31,077 $ 30,340 $ 97,927 $ 91,228
========= ========= ========= =========
Operating income (loss)
New Zealand $ (378) $ (2,462) $ (1,842) $ (5,165)
Other (495) (352) (228) (620)
--------- --------- --------- ---------
Total $ (873) $ (2,814) $ (2,070) $ (5,785)
========= ========= ========= =========
FOREST RESOURCES
Sales
Northwest U.S. $ 8,430 $ 11,488 $ 64,429 $ 59,070
Southeast U.S. 29,476 19,701 83,968 51,397
New Zealand 7,341 6,035 17,510 18,827
--------- --------- --------- ---------
Total $ 45,247 $ 37,224 $ 165,907 $ 129,294
========= ========= ========= =========
Operating income
Northwest U.S. $ 5,205 $ 6,576 $ 52,243 $ 43,846
Southeast U.S. 12,777 14,597 37,564 37,592
New Zealand 2,948 1,277 5,730 4,742
--------- --------- --------- ---------
Total $ 20,930 $ 22,450 $ 95,537 $ 86,180
========= ========= ========= =========
EBITDA per share
Northwest U.S. $ 0.23 $ 0.27 $ 2.00 $ 1.66
Southeast U.S. 0.94 0.62 2.65 1.63
New Zealand 0.23 0.17 0.54 0.52
--------- --------- --------- ---------
Total $ 1.40 $ 1.06 $ 5.19 $ 3.81
========= ========= ========= =========
</TABLE>
10
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index.
(b) Rayonier Inc. filed a current report on Form 8-K dated October 6,
2000, which included a press release dated September 22, 2000.
SIGNATURE
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. (Registrant)
BY /s/ GEORGE C. KAY
----------------------
George C. Kay
Vice President and
Corporate Controller
(Chief Accounting Officer)
November 10, 2000
11
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION
----------- ----------- --------
<S> <C> <C>
2 Plan of acquisition, reorganization, None
arrangement, liquidation or succession
3.1 Amended and restated articles of incorporation No amendments
3.2 By-laws No amendments
4 Instruments defining the rights of security holders, Not required to be filed. The
including indentures Registrant hereby agrees to file
with the Commission a copy of
any instrument defining the rights
of holders of the Registrant's
long-term debt upon request of
the Commission.
10 Material Contracts None
11 Statement re: computation of per share
earnings Not required to be filed
12 Statement re: computation of ratios Filed herewith
15 Letter re: unaudited interim financial
information None
18 Letter re: change in accounting principles None
19 Report furnished to security holders None
22 Published report regarding matters None
submitted to vote of security holders
23 Consents of experts and counsel None
24 Power of attorney None
27 Financial data schedule Filed herewith
99 Additional exhibits None
</TABLE>
12
