SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: September 24, 1995 Commission File Number: 1-7911
JAMES RIVER CORPORATION of Virginia
(Exact name of registrant as specified in its charter)
Virginia 54-0848173
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
120 Tredegar Street, Richmond, VA 23219
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 644-5411
Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)
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
Number of shares of $.10 par value common stock outstanding as of
November 1, 1995:
84,807,640 shares
JAMES RIVER CORPORATION
of Virginia
QUARTERLY REPORT ON FORM 10-Q
September 24, 1995
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION:
ITEM 1. Financial Statements:
Consolidated Balance Sheets as of September 24, 1995 and
December 25, 1994 3
Consolidated Statements of Operations for the quarters and
nine months ended September 24, 1995 and September 25, 1994 5
Consolidated Statements of Cash Flows for the nine months
ended September 24, 1995 and September 25, 1994 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 16
PART II. OTHER INFORMATION:
ITEM 1. Legal Proceedings 19
ITEM 2. Changes in Securities 19
ITEM 3. Defaults Upon Senior Securities 19
ITEM 4. Submission of Matters to a Vote of Security Holders 19
ITEM 5. Other Information 19
ITEM 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 21
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
JAMES RIVER CORPORATION
of Virginia and Subsidiaries
CONSOLIDATED BALANCE SHEETS
September 24, 1995 and December 25, 1994
(in thousands, except share data)
September December
1995 1994
ASSETS
Current assets:
Cash and cash equivalents $43,667 $59,296
Accounts receivable 906,674 913,501
Inventories 806,124 844,111
Prepaid expenses and other current assets 56,309 63,496
Deferred income taxes 85,688 95,126
Total current assets 1,898,462 1,975,530
Property, plant and equipment 6,054,862 6,925,036
Accumulated depreciation (2,048,203) (2,245,137)
Net property, plant and equipment 4,006,659 4,679,899
Investments in affiliates 140,948 125,097
Other assets 399,498 367,770
Goodwill 758,336 776,032
Total assets $7,203,903 $7,924,328
The accompanying notes are an integral part
of the consolidated financial statements.
JAMES RIVER CORPORATION
of Virginia and Subsidiaries
CONSOLIDATED BALANCE SHEETS, Continued
(in thousands, except share data)
September December
1995 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $583,409 $597,141
Accrued liabilities 509,566 513,599
Short-term borrowings 225,132
Current portion of long-term debt 16,976 221,367
Income taxes payable 20,554 11,647
Total current liabilities 1,130,505 1,568,886
Long-term debt 2,456,612 2,667,960
Accrued postretirement benefits
other than pensions 460,499 545,009
Deferred income taxes 497,796 594,793
Other long-term liabilities 267,411 231,129
Minority interests 163,842 154,930
Preferred stock, $10 par value, 5,000,000
shares authorized, issuable in series;
shares outstanding,
September 24, 1995 -- 3,630,581 and
December 25, 1994 -- 3,630,604 740,264 740,303
Common stock, $.10 par value, 150,000,000
shares authorized; shares outstanding,
September 24, 1995 -- 84,554,846 and
December 25, 1994 -- 81,695,419 8,455 8,170
Additional paid-in capital 1,275,347 1,211,904
Retained earnings 203,172 201,244
Total liabilities and shareholders'
equity $7,203,903 $7,924,328
The accompanying notes are an integral part
of the consolidated financial statements.
JAMES RIVER CORPORATION
of Virginia and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters (13 Weeks) and Nine Months (39 Weeks) Ended
September 24, 1995 and September 25,1994
(in thousands, except per share amounts)
Third Quarter Nine Months
1995 1994 1995 1994
Net sales $1,750,150 $1,444,773 $5,199,541 $3,748,421
Cost of goods sold 1,332,564 1,182,954 4,036,392 3,108,517
Selling and administrative
expenses 274,708 214,557 797,119 529,872
Severance and other items 23,413 31,684
Income from operations 119,465 47,262 334,346 110,032
Interest expense 56,159 51,824 176,560 123,334
Other income, net 16,779 6,653 35,327 24,348
Income before income taxes
and minority interest 80,085 2,091 193,113 11,046
Income tax expense:
Tax on current income 34,433 1,909 83,033 5,455
Effect of tax rate change 8,331 8,331
Total income tax expense 42,764 1,909 91,364 5,455
Income before minority
interests 37,321 182 101,749 5,591
Minority interests (1,028) (281) (1,550) 124
Net income (loss) $36,293 ($99) $100,199 $5,715
Preferred dividend requirements (14,642) (14,442) (43,928) (30,845)
Net income (loss) applicable to
common shares $21,651 ($14,541) $56,271 ($25,130)
Net income (loss) per common share
and common share equivalents $.25 $(.18) $.67 $(.31)
Cash dividends per common share $.15 $.15 $.45 $.45
Weighted average number of common
shares and common share equivalents 84,824 81,686 84,171 81,663
The accompanying notes are an integral part
of the consolidated financial statements.
JAMES RIVER CORPORATION
of Virginia and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months (39 Weeks) Ended
September 24, 1995 and September 25, 1994
(in thousands)
1995 1994
Cash provided by (used for) operating
activities:
Net income $100,199 $5,715
Items not affecting cash:
Depreciation expense and cost of timber
harvested 352,275 284,016
Deferred income tax provision 19,406 (2,221)
Equity in earnings of unconsolidated
affiliates (18,403) (6,736)
Severance and other items 31,684
Retirement benefits expense in excess of
funding 9,523 11,092
Amortization of goodwill 17,186 5,755
Other noncash items 2,310 7,620
Change in current assets and liabilities:
Accounts receivable (63,831) (30,006)
Inventories (54,295) 10,509
Prepaid expenses and other current assets (5,614) (11,389)
Accounts payable and accrued liabilities 35,726 (23,866)
Other current liabilities 10,030 (2,025)
Dividends received from unconsolidated
affiliates 20,144
Other, net (15,703) (15,611)
Cash provided by operating activities 440,637 232,853
Cash provided by (used for) investing
activities:
Expenditures for property, plant and
equipment (315,598) (220,752)
Cash paid for acquisitions, net (538,009)
Proceeds on sale of partnership option 22,200
Proceeds on sale of property, plant and
equipment 14,731 2,948
Cash received from sale of assets 8,545 18,853
Investments in affiliates (11,835)
Other, net 3,934 3,165
Cash used for investing activities (266,188) (745,630)
Cash provided by (used for) financing
activities:
Additions to long-term debt 7,750 417,611
Payments of long-term debt (659,921) (76,439)
Proceeds on spin-off of Crown Vantage Inc.,
net of cash and cash equivalents 480,394
Preferred stock issued, net of issuance costs 278,928
Common and preferred stock cash dividends
paid (80,754) (61,332)
Common stock issued on exercise of stock options 62,459 161
Other, net (6) (1,300)
Cash provided by (used for) financing
activities (190,078) 557,629
Increase (decrease) in cash and cash equivalents (15,629) 44,852
Cash and cash equivalents, beginning of period 59,296 23,620
Cash and cash equivalents, end of period $43,667 $68,472
The accompanying notes are an integral part
of the consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
In the opinion of management, the accompanying unaudited
consolidated financial statements of James River Corporation of
Virginia and Subsidiaries (the "Company" or "James River") contain
all adjustments (consisting of only normal recurring accruals)
necessary to present fairly the Company's consolidated financial
position as of September 24, 1995, and its results of operations for
the quarters (13 weeks) and the nine months (39 weeks) ended
September 24, 1995, and September 25, 1994, and its cash flows for
the nine months then ended. The balance sheet as of December 25,
1994, was derived from audited financial statements as of that date.
The results of operations for the nine months ended September 24,
1995, are not necessarily indicative of the results to be expected
for the full year. The results of Jamont N.V. ("Jamont"), the
Company's European consumer products subsidiary, are included on the
basis of closing dates which lag the Company's fiscal periods by one
month.
Certain amounts in the prior year's financial statements and
supporting footnote disclosures have been reclassified to conform to
the current year's presentation.
2. Acquisitions and Dispositions
On August 25, 1995, the Company completed the spin-off to
shareholders of a large part of the Company's Communications Papers
Business, along with the specialty paper-based portion of its Food
and Consumer Packaging Business. The new company, Crown Vantage Inc.
("Vantage"), includes the assets and liabilities of pulp and paper
making facilities located in St. Francisville, La.; Berlin-Gorham,
N.H.; Adams, Mass.; Newark, Del.; Richmond, Va.; St. Andrews and
Penicuik, Scotland; Ypsilanti, Parchment and Port Huron, Mich.; and
Milford N.J. These operations produce coated groundwood and uncoated
freesheet papers and pulp.
This spin-off consisted of a series of transactions in which
James River transferred to Vantage certain James River assets and
Vantage assumed certain related liabilities from James River. Crown
Paper Co. (the operating subsidiary of Vantage) obtained financing
through a public debt offering and initial borrowings under its bank
credit facilities (collectively, the "Financings"). The net proceeds
from the Financings of $480 million were received by James River and
were treated as a return of the Company's investment. James River
used the cash proceeds to reduce its long-term debt (see Note 7). In
addition, pay-in-kind notes which were valued at $85 million were
issued to James River from Vantage and treated as an additional
return of its investment in Vantage. Thereafter, on August 25, 1995,
all of the common stock of Vantage was distributed on a pro rata
basis to James River shareholders in a tax-free spin-off. In
connection with the spin-off, the Company and Vantage have entered
into various transition agreements that provide for the allocation of
assets, resources, employees, benefit plans, taxes, liabilities and
certain administrative and other services, and for the purchase and
sale of products between the Company and Vantage. The operating
results of the facilities which now make up Vantage are included in
the September 24, 1995, consolidated statement of income and the
consolidated statement of cash flows for the eight months (35 weeks)
ended August 27, 1995.
The spin-off required adjustments to the conversion price of
each series of convertible preferred stock. The conversion price
adjustments were made pursuant to formulas specified in the Articles
of Serial Designation for each series (see Note 9). Additionally,
the number of stock options, stock appreciation rights and deferred
stock hypothetical shares held prior to the spin-off were increased
by a factor of 1.016 per share, while the related share prices
related to the stock options and stock appreciation rights were
reduced by a factor of .984 per share in order to preserve the
economic benefit of these options and grants.
The September 24, 1995, consolidated balance sheet reflects the
impact of the $25.0 million reduction in retained earnings, the $11.1
million reduction in the equity component of the minimum pension
liability, and the $.4 million foreign currency translation
adjustment resulting from the distribution of Vantage stock. The
following non-cash supplemental information is provided regarding the
accounts of Vantage spun off as a stock dividend on August 25, 1995,
(in thousands):
Total current assets $211,265
Total current liabilities (99,762)
Property, plant and equipment 678,745
Other long-term assets 71,442
Pay-in-kind notes receivable (85,000)
Long-term debt (23,995)
Other long-term liabilities (131,358)
Deferred income taxes (104,455)
Total non-cash items 516,882
Net proceeds on spin-off, net of cash
and cash equivalents of $2.9 million (480,394)
Net non-cash impact of Vantage
spin-off $36,488
The pro forma consolidated operating data presented below is
based on James River's financial statements, as adjusted to give pro
forma effect to (i) James River's receipt of cash in connection with
the spin-off of Vantage, (ii) the receipt of pay-in-kind notes to
James River from Vantage and (iii) the execution of the transition
agreements between James River and Vantage. The pro forma
information is presented as if the spin-off had been completed as of
the beginning of 1995 for each period for which pro forma
consolidated operating data is presented. The pro forma financial
information does not purport to be indicative of the results of
operations which would actually have been reported if the spin-off
had occurred on the dates or for the periods indicated, or which may
be reported in the future.
Pro Forma Consolidated Operating Data Quarter Nine Months
(in millions, except per share data) Ended Ended
September 24, September 24,
1995 1995
Net sales $1,583.2 $4,562.8
Operating profit 103.1 281.9
Net income 31.8 87.0
Net income applicable to common shares
(after preferred dividend requirements) 17.2 43.1
Net income per common share $.20 $.51
In November 1994, James River initiated the exercise of its
option to purchase CRSS Capital, Inc.'s ("CRSS") 50% total direct and
indirect interest in the Naheola Cogeneration Limited Partnership.
In the spring of 1995, James River and CRSS reached a settlement
allowing James River to assign the right to purchase CRSS's interest
to UtilCo Group Inc. ("UtilCo"). In May 1995, UtilCo purchased CRSS's
50% interest in the chemical recovery and cogeneration facility at
the Naheola pulp and paper mill in Pennington, Alabama. The net
proceeds to James River on its sale of this purchase option to UtilCo
of $22.2 million are reflected in the consolidated statement of cash
flows for the nine months ended September 24, 1995. Such proceeds
were recognized as a deferred gain and will result in reduced
expenses for James River of $1.2 million annually. James River
retains ownership of the remaining 50% total direct and indirect
interest in this facility.
3. Severance and Other Items
Results for the third quarter of 1995 included nonrecurring
charges of $23.4 million ($15.7 million net of tax benefits and
minority interest, or $.18 per share) comprised of $18.6 million of
costs for reductions of approximately 230 employees and $4.8 million
of transaction costs associated with the spin-off of Vantage (see
Note 2). Employee reductions were made through a domestic voluntary
separation program (65 employees), domestic workforce reductions (105
employees) and workforce reductions at European Consumer Products
Business locations in the Nordic region (60 employees). Including
the charge of $8.3 million in the first quarter of 1995, related to
the workforce reductions of approximately 500 employees at the
European Consumer Products Business locations in the British Isles,
total nonrecurring charges were $31.7 million for the nine months
ended September 24, 1995.
During 1995, $2.8 million of severance charges, related to
approximately 70 terminated employees, were spun off with Vantage.
The Company made severance payments of $12.2 million to approximately
465 terminated employees in both the United States and Europe for
whom severance costs had been accrued beginning in December 1994.
The Company expects to incur additional severance expenses during the
fourth quarter of 1995 associated with ongoing cost reduction
programs and consolidations of certain operations in Europe.
4. Other Income
The components of other income were as follows for the nine
months ended September 24, 1995, and September 25, 1994 (in
thousands):
September September
1995 1994
Interest and investment income $8,439 $9,535
Equity in earnings of
unconsolidated affiliates 18,403 6,736
Gain on sale of assets 4,346 5,178
Foreign currency exchange loss (1,167) (348)
Other, net 5,306 3,247
Total other income $35,327 $24,348
5. Income Taxes
In August 1995, the French Parliament passed a law imposing a
10% tax surcharge on the normal corporate tax rate, effectively
increasing this tax rate from 33.33% to 36.66%, retroactive to
January 1, 1995. During the quarter ended September 24, 1995, the
Company recorded a one-time charge of approximately $8.3 million
($7.1 million net of minority interests, or $.08 per share) to
increase the deferred tax liability for the effect of this increase
in tax rates.
The Company's effective income tax rate was 43% for the nine
months ended September 24, 1995, excluding the effect of the $8.3
million charge for the tax rate change, compared to 49.4% for the
first nine months of 1994. The decrease in the effective tax rate
from the prior year was primarily due to the relative size of
nondeductible permanent differences, primarily goodwill, to increased
pre-tax income.
6. Inventories
The components of inventories were as follows as of September
24, 1995, and December 25, 1994 (in thousands):
September December
1995 1994
Raw materials $212,788 $187,634
Finished goods and work in process 519,407 543,872
Stores and supplies 149,094 184,457
881,289 915,963
Reduction to state certain
inventories at last-in,
first-out cost (75,165) (71,852)
Total inventories $806,124 $844,111
7. Long-Term Debt
In the third quarter of 1995, approximately $24.9 million in
revenue bonds and other senior notes, including current portion, were
spun off to Vantage. Additionally, net proceeds of $480 million
received by James River from the spin-off were used to pay down $285
million in floating rate notes, $118 million in money market notes
and $77 million in commercial paper at weighted average interest
rates of 6.62%, 5.90% and 6.08%, respectively. The Company's total
debt decreased from $3,114 million as of December 25, 1994 to $2,474
million as of September 24, 1995.
In support of the Company's focus as a worldwide consumer
products business, management has decided to utilize its global
revolving credit capacity to refinance short-term borrowings of
approximately $200 million, as compared to the segregation of
domestic and foreign borrowing capacity employed in prior years.
Because of the availability of long-term financing under the terms of
the domestic and foreign revolving credit agreements and the
Company's intention to refinance its worldwide commercial paper,
money market notes and other short-term borrowings on a long-term
basis, these borrowings have been classified as long-term debt in the
September 24, 1995, balance sheet.
8. Financial Instruments
The estimated fair value of the Company's $1,286 million
notional amount of interest rate swaps was a liability of $26.2
million as of September 24, 1995, compared to a liability of $128
million as of December 25, 1994. As of September 24, 1995, the
carrying value of foreign exchange contracts was a net liability of
$80.2 million and the estimated fair value of such contracts was a
net liability of $102.1 million, compared to net liabilities of $39.6
million and $73.0 million, respectively, as of December 25, 1994.
The estimated fair values were based on quoted market prices of
comparable instruments and current market rates as of September 24,
1995, and December 25, 1994, respectively.
9. Preferred Stock
The required adjustments to the conversion price of each series
of convertible preferred stock effective as of August 28, 1995,
resulting from the spin-off of Vantage are described below.
Prior to the spin-off of Vantage, the Series K $3.375 Cumulative
Convertible Exchangeable Preferred Stock ("Series K") was convertible
at the option of the holder into common stock at $40.75 per common
share, approximately equivalent to 1.23 shares of common stock for
each preferred share. The new conversion price for the Series K
preferred stock is $37.38 per common share, approximately equivalent
to 1.34 shares of common stock for each preferred share.
The Series L $14.00 Cumulative Convertible Exchangeable
Preferred Stock, ("Series L") and Series N $14.00 Cumulative
Convertible Exchangeable Preferred Stock ("Series N") are held in the
form of depositary shares, each of which represents a one-quarter
interest in a preferred share. The Series L and the Series N
depositary shares were each convertible at the option of the holder
into common stock at $40.00 per common share, equivalent to 1.25
shares of common stock for each depositary share. The new conversion
price for the Series L and the Series N depositary shares is $36.69
per common share, approximately equivalent to 1.36 shares of common
stock for each depositary share.
The Series P 9% Cumulative Convertible Preferred Stock ("Series
P") is held in the form of depositary shares, each of which
represents a one-hundredth interest in a preferred share. Prior to
the spin-off of Vantage, the Series P depositary shares were
convertible at the option of the holder into common stock at a rate
.8547 shares of common stock for each depositary share. The new
conversion rate for the Series P depositary shares is .9206 shares of
common stock for each depositary share. Additionally, the common
equivalent rate (the rate at which each Series P depositary share
would automatically convert into common stock, if still outstanding
on July 1, 1998) was equal to one share of common stock for each
depositary share. The common equivalent rate was adjusted to
approximately 1.08 shares of common stock for each depositary share,
following the spin-off.
10. Commitments and Contingent Liabilities
(a) Put and Call Arrangements:
James River is a party to a put and call arrangement
related to the 14% minority interest in Jamont currently owned
by EuroPaper Inc. ("EuroPaper"). EuroPaper may put its interest
in Jamont to James River during May 1996 and James River may
call these shares during August 1996, each at a fixed price of
approximately 1.04 billion French francs (approximately $211.4
million using exchange rates in effect as of September 24,
1995). In addition, James River has a separate call agreement
with EuroPaper under which it may call EuroPaper's shares
through April 1996 at a formula price.
James River and UtilCo each own 50% of the Naheola
Partnership, which was formed in order to develop and operate a
$300 million chemical recovery unit at the Company's Naheola
mill. James River has an option to purchase UtilCo's interest
at a formula price. UtilCo also has an option to put its
interest in the partnership to James River at a formula price.
UtilCo's option may only be exercised (i) if the facility
becomes subject to regulation as a public utility, (ii) if
production levels at the Naheola mill fall below certain levels
due to the Company's shifting of production to other mills or
(iii) if the Naheola mill is sold to a competitor of UtilCo;
management believes the probability of the occurrence of any of
these events is remote.
(b) Environmental Matters:
Like its competitors, James River is subject to extensive
regulation by various federal, state, provincial and local
agencies concerning compliance with environmental control
statutes and regulations. These regulations impose limitations
on the discharge of materials into the environment, including
effluent and emission limitations, as well as require the
Company to obtain and operate in compliance with the conditions
of permits and other governmental authorizations. Future
regulations could materially increase the Company's capital
requirements and certain operating expenses in future years.
In December 1993, the U.S. Environmental Protection Agency
("EPA") published draft rules which contain proposed regulations
affecting pulp and paper industry discharges of wastewater and
gaseous emissions ("cluster rules"). The final rules are likely
to be issued in the summer of 1996, with a nominal compliance
date of 1999. These rules may require significant changes in
the pulping and/or bleaching process presently used in some U.S.
pulp mills, including several of James River's mills. The
implementation of the rules could materially increase the
Company's capital expenditures between 1997 and 1999. Based on
its original evaluation, the Company expected that such capital
expenditures could be at least $300 million, if the regulations
are approved as originally proposed. Of this amount,
approximately $70 million has been associated with the
facilities spun off to Vantage, reducing James River's portion
of potential costs to meet the original proposal to at least
$230 million. These estimates could change, depending on
several factors, including changes to the proposed regulations,
new developments in control and process technology, and
inflation.
In addition, James River has been identified as a
potentially responsible party ("PRP"), along with others, at
various EPA designated Superfund sites and is involved in
remedial investigations and actions under federal and state
laws. It is James River's policy to accrue remediation costs
when it is probable that such costs will be incurred and when
they can be reasonably estimated. As of September 24, 1995,
James River's accrued environmental liabilities, including
remediation and landfill closure costs, totaled $25.7 million
net of approximately $10.5 million of accrued environmental
liabilities spun off to Vantage. The Company periodically
reviews the status of all significant existing or potential
environmental issues and adjusts its accrual as necessary. The
accruals do not reflect any possible future insurance
recoveries. Estimates of costs for future remediation are
necessarily imprecise due to, among other things, the
identification of presently unknown remediation sites and the
allocation of costs among PRP's. The Company believes that its
share of the costs of cleanup for its current remediation sites
will not have a material adverse impact on its consolidated
financial position but could have a material effect on
consolidated results of operations in a given quarter or year.
As is the case with most manufacturing and many other entities,
there can be no assurance that the Company will not be named as
a PRP at additional sites in the future or that the costs
associated with such additional sites would not be material.
(c) Bondholder Litigation:
In 1994, James River was sued in Morgan County, Alabama, in
a purported class action and in Bridgeport, Connecticut, by
certain former holders of James River's 10-3/4% Debentures due
October 1, 2018. Most of these Debentures were retired by means
of a tender offer to all holders commenced on September 18,
1992. The remainder were redeemed on November 2, 1992. Merrill
Lynch & Co., which acted as James River's dealer manager for the
tender, is also named as a defendant in the Alabama case. In
general, the complaints allege violations of a covenant
prohibiting use of lower cost borrowed funds to redeem the
Debentures before October 1, 1998, and of various disclosure
obligations, and seek damages in excess of $50 million plus
punitive damages in excess of $500 million. James River
believes that these claims are without merit and intends to
defend them vigorously. Although the ultimate disposition of
legal proceedings cannot be predicted with certainty, it is the
opinion of the Company's management that the outcome of any
claim which is pending or threatened, either individually or on
a combined basis, will not have a materially adverse effect on
the consolidated financial condition of James River but could
materially affect consolidated results of operations in a given
quarter or year.
11. Segment Information
James River's net sales and income from operations by business
segment were as follows for the quarters and nine months ended
September 24, 1995, and September 25, 1994 (in thousands):
Third Quarter Nine Months
September September September September
1995 1994 1995 1994
Net sales:
Consumer products:
North America $700,135 $626,480 $1,996,302 $1,805,074
Europe 421,101 222,388 1,201,618 222,388
Total consumer
products 1,121,236 848,868 3,197,920 2,027,462
Food and consumer
packaging 411,202 412,808 1,263,083 1,187,873
Communications papers 269,678 227,988 896,879 663,485
Intersegment elimination (51,966) (44,891) (158,341) (130,399)
Total net sales $1,750,150 $1,444,773 $5,199,541 $3,748,421
Operating profit (loss):
Consumer Products:
North America $77,156 $44,042 $173,989 $119,349
Europe 10,970 486 24,981 486
Total consumer
products 88,126 44,528 198,970 119,835
Food and consumer
packaging 8,520 16,477 43,003 77,420
Communications papers 60,810 (4,099) 165,466 (55,674)
Severance and other items (23,413) (31,684)
General corporate
expenses (14,578) (9,644) (41,409) (31,549)
Income from operations $119,465 $47,262 $334,346 $110,032
12. Pro Forma Data -- Jamont
In July 1994, James River increased its ownership interest in
Jamont from 43% to 86% for approximately $575 million and began
accounting for Jamont as a consolidated subsidiary. The following
pro forma information assumes that the acquisition of the additional
interest in Jamont occurred as of the beginning of 1994. The pro
forma financial information does not purport to be indicative of the
results of operations which would actually have been reported if the
transactions had occurred for the periods indicated or which may be
reported in the future. Jamont is included in the consolidated
balance sheets as of September 24, 1995, and December 25, 1994, and
its results of operations are consolidated for all of 1995.
Pro Forma Consolidated Quarter Nine Months
Operating Data Ended Ended
(in millions, except per share September 25, September 25,
data) 1994 1994
Net sales $1,535.3 $4,535.6
Operating profit 52.3 143.9
Net income .4 .3
Net loss applicable to common
shares (after preferred dividend
requirements) (14.0) (43.4)
Net loss per common share $(.17) $(.53)
13. Subsequent Event
On November 1, 1995, James River signed two definitive
agreements with Benchmark Corporation of Delaware ("Benchmark")
related to their plastic cutlery and foam cup operations. Under the
first agreement, the Company will acquire Benchmark's plastic
cutlery, straw and thermoforming operations. Under the second
agreement, James River's Handi-Kup foam cup operations will be
combined with Benchmark's foam cup operations in a joint venture. In
consideration for both transactions on a combined basis, the Company
will pay approximately $24 million and receive a 45% minority
interest in the new foam cup joint venture. On November 6, 1995, the
Company completed the plastic cutlery acquisition; the Company
anticipates, subject to normal closing conditions, that the foam cup
joint venture will be completed during November 1995.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
The Company reported net income of $36.3 million, or $.25 per
share, for its third quarter ended September 24, 1995, substantially
above the net loss of $.1 million, or $(.18) per share, reported in
1994's third quarter. Net sales of $1.8 billion reported in the third
quarter were 21% above the $1.4 billion of sales in the prior year's
quarter. On August 25, 1995, James River completed the spin-off of
Crown Vantage Inc. ("Vantage") to the Company's common shareholders.
Vantage is comprised of a large part of what was formerly James
River's Communications Papers Business, as well as the specialty
paper-based portion of its Food and Consumer Packaging Business.
Sales and profits for the spun off operations were included in James
River's reported third quarter results for the two months (9 weeks)
prior to August 25. After this date, the results of Vantage, which
is an independent company, were not included in those of James River.
Compared to the prior year, $115.5 million, or 8% of the sales
growth was attributable to consolidating three months of the European
Consumer Products Business results in 1995 compared to two months in
the 1994 quarter. The remaining sales growth of 13% represented a
combination of improved pricing in many product lines, as discussed
below, offset by a reduction in sales attributable to the absence of
Vantage locations for one month during the quarter. Income from
operations totaled $119.5 million for the third quarter compared to
$47.3 million reported in the prior year. Results for the third
quarter of 1995 included severance and other nonrecurring charges of
$23.4 million, or $.18 per share, net of tax benefits and minority
interests.
Operating profits in the North American Consumer Products
Business increased 75% from $44.0 million in last year's third
quarter to $77.2 million in the current quarter, while net sales
increased 12% over the same period, from $626.5 million to $700.1
million. Improved sales and profitability continue to be driven by
substantial price increases ranging from approximately 10% to 20%
over 1994 levels, largely in response to higher raw materials costs.
The retail category benefited from a mid-year list price increase
averaging approximately 9%. List price increases of 8% to 10% were
also implemented effective July 1 in commercial channels. Product
mix upgrades also contributed to higher profitability as compared to
last year. Current quarter volumes in the retail and warehouse club
lines increased slightly compared to the prior year, while commercial
volumes declined by 11% for the same period. The decline in
commercial volumes was attributable to the Company's election to
reduce its commercial product line offerings, combined with softer
demand resulting from a competitive pricing environment.
Operating profits for the European Consumer Products Business
were $11 million, compared to $5.6 million on a pro forma basis,
assuming Jamont had been consolidated for three months, in last
year's third quarter. Net sales increased to $421.1 million in this
year's third quarter from $312.9 million on a pro forma basis in the
prior year. The improvement in sales and operating profit was
primarily attributable to the positive impact of pricing increases in
response to higher raw materials costs. Jamont continued the product
pricing leadership established early this year in European markets.
Overall, pricing was up approximately 12% from the same time period
last year. Improved profitability also resulted from cost reduction
efforts in both administrative and manufacturing costs. The business
emphasis for the remainder of 1995 and into 1996 will be more
aggressive marketing and increased sales volumes.
The Food and Consumer Packaging Business reported a decline in
operating profits, from $16.5 million in last year's third quarter to
$8.5 million in the current quarter, while reported net sales
remained comparable to the prior year. When adjusted for the
operations spun off with Vantage, net sales increased approximately
5% and operating profits decreased approximately 18%. The increase
in sales was due to price increases implemented to recover the rapid
escalation in raw materials costs. This increase was offset
partially by an 8% decline in volumes associated with additional
industry capacity in flexible packaging and market-related downtime
taken at the Kalamazoo facility. Primary causes of the decline in
operating profit include low product demand as customers reduced
their inventories, increased raw material costs and excess
manufacturing costs.
Operating profits for the Communications Papers Business
increased to $60.8 million in 1995's third quarter, despite the
absence of Vantage operations after August 25, compared with a loss
of $4.1 million in the prior year, while net sales increased from
$228.0 million in the third quarter of 1994 to $269.7 million in the
third quarter of 1995. When adjusted for the spin-off of Vantage,
sales increased approximately 48% in the 1995 third quarter over the
1994 third quarter and operating profits improved from a small loss
in the third quarter of 1994, to approximately $38.0 million in the
third quarter of 1995. Most of these increases can be attributed to
dramatic price increases of over 50% from last year and the benefits
of cost reduction efforts effected during the last cyclical downturn.
This improvement in profitability occurred in spite of an increase in
costs for woodchips in the Pacific Northwest of approximately 50%
during the period from the third quarter of 1994 to the third quarter
of 1995.
For the nine months, James River reported net sales of $5.2
billion in 1995, compared to $3.7 billion in 1994. Net income for
the first nine months of 1995 was $100.2 million, or $.67 per share,
compared to 1994's net income of $5.7 million, or a loss of $.31 per
share. Results for 1995 included net charges of $16.9 million ($.19
per share) primarily for domestic and foreign severance costs, $7.1
million ($.08 per share) for a cumulative income tax charge resulting
from the increase in the French income tax rate and $4.1 million
($.05 per share) for transaction costs associated with the Vantage
spin-off (see Note 3 of Notes to Consolidated Financial Statements),
while 1994 results included net income of $5.4 million, ($.07 per
share) from nonrecurring interest income. General corporate expenses
for 1995 increased over 1994 primarily due to consulting fees
incurred in connection with cost reduction programs. Interest
expense for the first nine months in 1995 increased by $53.2 million
compared with the same period in 1994 . The increase in interest
resulted from the increase of total debt of approximately $1.1
billion associated with the July 1994 purchase and consolidation of
Jamont which was partially offset by lower interest charges in the
month of September primarily due to the decrease of $480 million in
debt associated with the Vantage spin-off. Other income increased to
$35.3 million for the first nine months of 1995 from $24.3 million
for the comparable period in 1994. This increase was due to the
increase in equity in earnings of unconsolidated affiliates,
primarily the Company's earnings from its Brazilian affiliate which
had benefited from increases in worldwide market pulp prices.
Further detail on other income is included in Note 4 of Notes to
Consolidated Financial Statements. The change in the effective tax
rate for 1995 is discussed in Note 5 of Notes to Consolidated
Financial Statements. Results for the quarter and year ended
December 31, 1995, will include 14 weeks and 53 weeks, respectively,
as the Company's fiscal year ends on the last Sunday in December.
A favorable pricing environment, combined with better realizations
from continued substantial cost reduction programs should lead to
margin improvements. Additionally, the spin-off of Vantage achieved
the immediate goal of reducing debt, as well as accomplished longer-
term goals of reducing cyclicality and improving business focus. On
October 2, 1995, Miles L. Marsh joined James River as President and
Chief Executive Officer. Mr. Marsh has a strong consumer products
background and previous experience in restructuring, improving
productivity and reducing costs.
Financial Condition
Capital expenditures totaled $316 million for the first nine
months of 1995 compared with $221 million for the same period of
1994. This increase is primarily due to the effect of the
consolidation of a full nine months of Jamont's capital spending in
1995 as compared to only two months of spending included in 1994
results. Cash provided by operations for the nine months ended
September 24, 1995, totaled $441 million, compared to $233 million in
the comparable period of 1994. This increase is primarily due to
increases in net income as adjusted for the impact of non-cash
depreciation and dividends received from its unconsolidated Brazilian
affiliate and the Naheola Partnership in 1995. The Company's current
ratio increased to 1.68 as of September 24, 1995, from 1.26 as of
December 25, 1994, and working capital increased to $768 million from
$407 million for the same time period. The increase in working
capital of $361 million was primarily attributable to the application
of a portion of the net proceeds on the spin-off to reduce the
current portion of certain long-term debt securities and the
recharacterization of short-term borrowings as long-term debt based
on the Company's ability and intention to refinance such borrowings.
Cash provided by financing activities in 1995 also includes proceeds
of $62.5 million related to the issuance of 2.8 million shares of
common stock through the exercise of stock options.
James River's ratio of total debt, including the current portion
and short-term borrowings, to total capitalization was 50.8% as of
September 24, 1995, compared to 57.4% as of December 25, 1994. For
purposes of calculating this ratio, total capitalization represents
the sum of current and long-term debt, including short-term
borrowings, minority interests and equity accounts. In the third
quarter of 1995, total debt was reduced by $504.9 million as a result
of the Vantage spin-off and the application of the net proceeds
received (see Note 7 of Notes to Consolidated Financial Statements).
For the nine months ended September 24, 1995, the ratio of earnings
to fixed charges was 1.86. For the year ended December 25, 1994,
earnings were inadequate to cover fixed charges by $18.8 million.
As of September 24, 1995, under the most restrictive provisions
of the Company's debt agreements, the Company had additional
borrowing capacity of approximately $1,250 million and net worth in
excess of the minimum requirement specified by such agreements of
approximately $475 million.
In May 1995, James River completed the assignment of the right
to purchase the remaining 50% total direct and indirect interest in
the Naheola Partnership to UtilCo. UtilCo paid James River $24.3
million for the assignment of the purchase option, and the net
proceeds of $22.2 million were recognized as a deferred gain and will
result in reduced expenses of approximately $1.2 million per year
(see Note 2 of Notes to Consolidated Financial Statements).
On November 1, 1995, James River signed two definitive
agreements with Benchmark Corporation of Delaware ("Benchmark")
related to their plastic cutlery and foam cup operations. Under the
first agreement, the Company will acquire Benchmark's plastic
cutlery, straw and thermoforming operations. Under the second
agreement, James River's Handi-Kup foam cup operations will be
combined with Benchmark's foam cup operations in a joint venture. In
consideration for both transactions on a combined basis, the Company
will pay approximately $24 million and receive a 45% minority
interest in the new foam cup joint venture. On November 6, 1995, the
Company completed the plastic cutlery acquisition; the Company
anticipates, subject to normal closing conditions, that the foam cup
joint venture will be completed during November 1995.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
As previously disclosed, James River had been notified by the
EPA of a civil action filed in the federal court in New Hampshire
related to certain environmental violations at the Company's
previously owned Berlin, NH, mill. The Company had agreed to a
settlement of $200,000 as well as the implementation of
environmentally beneficial capital improvements costing approximately
$500,000. As part of the Company's spin-off of certain of its assets
to Crown Vantage Inc. on August 25, 1995, the liability for the
penalty and the supplemental environmental improvement projects were
transferred to Crown Vantage Inc.
Item 2. CHANGES IN SECURITIES.
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Item 5. OTHER INFORMATION.
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
The exhibits listed below are filed as part of this
quarterly report. Each exhibit is listed according to the
number assigned to it in the Exhibit Table of Item 601 of
Regulation S-K.
Exhibit Starts
Number Description on Page
3 Amended and Restated Bylaws of James River
Corporation of Virginia, amended as of
October 2, 1995 -- filed herewith. E-1
11 Computation of Earnings per Share -- filed
herewith. 22
12 Computation of Ratio of Earnings to Fixed
Charges -- filed herewith. 25
27 Financial Data Schedules for the nine
months ended September 24, 1995 (filed
electronically only).
(b) Reports on Form 8-K:
During the quarter ended September 24, 1995, and subsequent
thereto, the Company filed the following Current Reports on
Form 8-K:
Date of Report Event Reported
July 20, 1995 The Company published a press release
announcing its results of operations
for the second quarter and six months
ended June 25, 1995.
August 16, 1995 The Company published press releases
announcing (i) the approval by the
Company's Board of Directors of the
distribution of all the outstanding
shares of common stock of Crown Vantage
Inc. to holders of record of James
River common stock, and (ii) the
election of Miles L. Marsh, as
President , Chief Executive Officer and
member of the Board of Directors of
James River.
August 25, 1995 The Company announced the completion of
the spin-off to shareholders' of Crown
Vantage Inc. and provided pro forma
financial information.
September 18, 1995 The Company published a press release
announcing management changes in its
European Consumer Products Division.
John F. Lundgren was named acting
president of the European Division,
replacing Ronald L. Singer.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
JAMES RIVER CORPORATION of Virginia
By:/s/Stephen E. Hare
Stephen E. Hare
Senior Vice President, Corporate Finance
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: November 7, 1995
Exhibit 3
AMENDED AND RESTATED
BYLAWS OF
JAMES RIVER CORPORATION OF VIRGINIA
(amended as of October 2, 1995)
ARTICLE I - MEETINGS OF STOCKHOLDERS
Section 1.1 Closing of Transfer Books and Fixing of
Record Date. For the purpose of determining stockholders
entitled to notice of, or to vote at, any meeting of stockholders
or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of stockholders for
any other proper purpose, the Board of Directors or the Executive
Committee shall fix in advance a date as the record date for any
such determination of stockholders, such date to be not more than
70 days before the meeting or action. When a determination of
stockholders entitled to vote at any meeting of stockholders has
been made as provided in this article, such determination shall
apply to any adjournment thereof, except as is otherwise provided
by law.
Section 1.2 Place and Time of Meetings. Meetings of
stockholders shall be held at such place, either within or
without the Commonwealth of Virginia, and at such time, as may be
provided in the notice of the meeting.
Section 1.3 Organization and Order of Business. The
Chairman of the Board of Directors (the "Chairman") or, in his
absence, the President shall serve as chairman at all meetings of
the stockholders. In the absence of both of the foregoing
officers or if both of them decline to serve, a majority of the
shares entitled to vote at such meeting may appoint any person to
act as Chairman. The Secretary of the Corporation or, in his
absence, an Assistant Secretary, shall act as secretary at all
meetings of the stockholders. In the event that neither the
Secretary nor any Assistant Secretary is present, the Chairman
may appoint any person to act as secretary of the meeting.
The Chairman shall have the authority to make such rules and
regulations, to establish such procedures and to take such steps
as he may deem necessary or desirable for the proper conduct of
each meeting of the stockholders, including, without limitation,
the authority to make the agenda and to establish procedures for
(i) the dismissal of business not properly presented, (ii) the
maintenance of order and safety, (iii) placing limitations on the
time allotted to questions or comments on the affairs of the
Corporation, (iv) placing restrictions on attendance at a meeting
by persons or classes of persons who are not stockholders or
their proxies, (v) restricting entry to a meeting after the time
prescribed for the commencement thereof and (vi) the
commencement, conduct and close of voting on any matter.
Section 1.4 Annual Meeting. The annual meeting of
stockholders shall be held on the third or fourth Thursday in
April of each year as set by the Board of Directors or on such
other dates as shall be approved by the Board of Directors.
E-1
At each annual meeting of stockholders, only such business
shall be conducted as is proper to consider and has been brought
before the meeting (i) by or at the direction of the Board of
Directors or (ii) by a stockholder of the Corporation who is a
stockholder of record of a class of shares entitled to vote on
such business at the time of the giving of the notice hereinafter
described in this Section 1.4 and who complies with the notice
procedures set forth in this Section 1.4. In order to bring
business before an annual meeting of stockholders, a stockholder,
in addition to complying with any other applicable requirements,
must have given timely written notice of his intention to bring
such business before the meeting to the Secretary of the
Corporation. To be timely, a stockholder's notice must be given,
either by personal delivery or by United States certified mail,
postage prepaid, addressed to the Secretary of the Corporation at
the principal office of the Corporation and received (i) on or
after December 1st of the year immediately preceding the year in
which the meeting will be held and before January 1st of the year
in which the meeting will be held or (ii) not less than 60 days
before the date of the annual meeting if the date of such
meeting, as prescribed in these Bylaws, has been changed by more
than 30 days.
Each such stockholder's notice shall set forth as to each
matter the stockholder proposes to bring before the annual
meeting (i) the name and address, as they appear on the
Corporation's stock transfer books, of the stockholder proposing
such business, (ii) the class and number of shares of stock of
the Corporation beneficially owned by such stockholder, (iii) a
representation that such stockholder is a stockholder of record
and intends to appear in person or by proxy at such meeting to
bring before the meeting the business specified in the notice,
(iv) a brief description of the business desired to be brought
before the meeting, including the complete text of any
resolutions to be presented at the meeting and the reasons for
wanting to conduct such business, and (v) any material interest
which the stockholder has in such business.
The Secretary of the Corporation shall deliver each such
stockholder's notice that has been timely received to the
Chairman or a committee designated by the Board of Directors for
review.
Notwithstanding the foregoing provisions of this
Section 1.4, a stockholder seeking to have a proposal included in
the Corporation's proxy statement for an annual meeting of
stockholders shall comply with the requirements of Regulation 14A
under the Securities Exchange Act of 1934, as amended from time
to time, or with any successor regulation.
Section 1.5 Special Meetings. Special meetings of the
stockholders may be called by the Chairman, the President or the
Board of Directors. Only business within the purpose or purposes
described in the notice for a special meeting of stockholders may
be conducted at the meeting.
Section 1.6 Notice of Meetings. Written notice stating
the place, day and hour of each meeting of stockholders and, in
the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be given by mail not less than ten
nor more than 60 days before the date of the meeting (except when
a different time is required in these Bylaws or by law) to each
stockholder of record entitled to vote at such meeting and to
such nonvoting stockholders as may be required by law. Such
notice shall be deemed to be effective when deposited in the
United States mail with postage thereon prepaid, addressed to the
stockholder at his address as it appears on the stock transfer
books of the Corporation.
Notice of a stockholders' meeting to act on (i) an amendment
of the Articles of Incorporation; (ii) a plan of merger or share
exchange; (iii) the sale, lease, exchange or other disposition of
all or substantially all the property of the Corporation
otherwise than in the usual and regular course of business, or
(iv) the dissolution of the Corporation, shall be given, in the
manner provided above, not less than 25 nor more than 60 days
before the date of the meeting. Any notice given pursuant to
this paragraph shall state that the purpose, or one of the
purposes, of the meeting is to consider such action and shall be
accompanied by (x) a copy of the proposed amendment, (y) a copy
of the proposed plan of merger or share exchange, or (z) a
summary of the agreement pursuant to which the proposed
transaction will be effected. If only a summary of the agreement
is sent to the stockholders, the Corporation shall also send a
copy of the agreement to any stockholder who requests it.
If a meeting is adjourned to a different date, time or
place, notice need not be given if the new date, time or place is
announced at the meeting before adjournment. However, if a new
record date for an adjourned meeting is fixed (which shall be
done if the meeting is adjourned to a date more than 120 days
after the date fixed for the original meeting), notice of such
date shall be given to those persons entitled to notice who are
stockholders as of the new record date, unless a court provides
otherwise.
Section 1.7 Quorum and Voting Requirements. Each
outstanding share of common stock shall be entitled to one vote
on each matter submitted to a vote at a meeting of stockholders.
Shares of other classes and series shall be entitled to such vote
as may be provided in the Articles of Incorporation.
Shares entitled to vote as a separate voting group may take
action on a matter at a meeting only if a quorum of those shares
exists with respect to that matter. Unless otherwise required by
law, a majority of the votes entitled to be cast on a matter by a
voting group constitutes a quorum of that voting group for action
on that matter. Once a share is represented for any purpose at a
meeting, it is deemed present for quorum purposes for the
remainder of the meeting and for any adjournment of that meeting
unless a new record date is or shall be set for that adjourned
meeting. If a quorum exists, action on a matter, other than the
election of directors, by a voting group is approved if the votes
cast within the voting group favoring the action exceed the votes
cast opposing the action, unless a greater number of affirmative
votes is required by law or by the Articles of Incorporation.
Directors shall be elected by a plurality of the votes cast by
the shares entitled to vote in the election at a meeting at which
a quorum is present unless a different vote in required by the
Articles of Incorporation. Less than a quorum may adjourn a
meeting.
Section 1.8 Proxies. A stockholder may vote his shares
in person or by proxy. A stockholder may appoint a proxy to vote
or otherwise act for him by signing an appointment form, either
personally or by his attorney-in-fact. An appointment of a proxy
is effective when received by the Secretary or other officer or
agent authorized to tabulate votes and is valid for 11 months
unless a longer period is expressly provided in the appointment
form. An appointment of a proxy is revocable by the stockholder
unless the appointment form conspicuously states that it is
irrevocable and the appointment is coupled with an interest.
The death or incapacity of the stockholder appointing a
proxy does not affect the right of the Corporation to accept the
proxy's authority unless notice of the death or incapacity is
received by the Secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority under the
appointment. An irrevocable appointment is revoked when the
interest with which it is coupled is extinguished. A transferee
for value of shares subject to an irrevocable appointment may
revoke the appointment if he did not know of its existence when
he acquired the shares and the existence of the irrevocable
appointment was not noted conspicuously on the certificate
representing the shares. Subject to any legal limitations on the
right of the Corporation to accept the vote or other action of a
proxy and to any express limitation on the proxy's authority
appearing on the face of the appointment form, the Corporation is
entitled to accept the proxy's vote or other action as that of
the stockholder making the appointment. Any fiduciary entitled
to vote any shares may vote such shares by proxy.
Section 1.9 Waiver of Notice; Attendance at Meeting. A
stockholder may waive any notice required by law, the Articles of
Incorporation or these Bylaws before or after the date and time
of the meeting that is the subject of such notice. The waiver
shall be in writing, be signed by the stockholder entitled to the
notice, and be delivered to the Secretary of the Corporation for
inclusion in the minutes or filing with the corporate records.
A stockholder's attendance at a meeting (i) waives objection
to lack of notice or defective notice of the meeting, unless the
stockholder at the beginning of the meeting objects to holding
the meeting or transacting business at the meeting, and (ii)
waives objection to consideration of a particular matter at the
meeting that is not within the purpose or purposes described in
the meeting notice, unless the stockholder objects to considering
the matter when it is presented.
Section 1.10 Action Without Meeting. Action required or
permitted to be taken at a stockholders' meeting may be taken
without a meeting and without action by the Board of Directors if
the action is taken by all the stockholders entitled to vote on
the action. The action shall be evidenced by one or more written
consents describing the action taken, signed by all the
stockholders entitled to vote on the action, and delivered to the
Secretary of the Corporation for inclusion in the minutes or
filing with the corporate records. Action taken under this
section shall be effective according to its terms when all
consents are in the possession of the Corporation. A stockholder
may withdraw a consent only by delivering a written notice of
withdrawal to the Corporation prior to the time that all consents
are in the possession of the Corporation.
If not otherwise fixed pursuant to the provisions of Section
1.1, the record date for determining stockholders entitled to
take action without a meeting is the date the first stockholder
signs the consent described in the preceding paragraph.
If notice of proposed action is required to be given to
nonvoting stockholders and the action is to be taken by unanimous
consent of the voting stockholders, the Corporation shall give
its nonvoting stockholders written notice of the proposed action
at least ten days before the action is taken. The notice shall
contain or be accompanied by the same material that would have
been required by law to be sent to nonvoting stockholders in a
notice of a meeting at which the proposed action would have been
submitted to the stockholders for action.
Section 1.11 Voting List. The officer or agent having
charge of the stock transfer books of the Corporation shall make,
at least ten days before each meeting of stockholders, a complete
list of the stockholders entitled to vote at such meeting or any
adjournment thereof, with the address of and the number of shares
held by each. The list shall be arranged by voting group and
within each voting group by class or series of shares. Such list
shall be kept on file at the registered office of the
Corporation, or at its principal office or at the office of its
transfer agent or registrar, for a period of ten days prior to
such meeting and shall be subject to the inspection of any
stockholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any stockholder
during the whole time of the meeting for the purposes thereof.
The original stock transfer books shall be prima facia evidence
as to who are the stockholders entitled to examine such list or
transfer books or to vote at any meeting of the stockholders.
The right of a stockholder to inspect such list at any other time
shall be subject to the limitations established by law.
If the requirements of this section have not been
substantially complied with, the meeting shall, on the demand of
any stockholder in person or by proxy, be adjourned until such
requirements are met. Refusal or failure to prepare or make
available the stockholders' list does not affect the validity of
action taken at the meeting prior to the making of any such
demand, but any action taken by the stockholders after the making
of any such demand shall be invalid and of no effect.
ARTICLE II - DIRECTORS
Section 2.1 General Powers. The Corporation shall have a
Board of Directors. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the
Corporation managed under the direction of, its Board of
Directors, subject to any limitation set forth in the Articles of
Incorporation.
Section 2.2 Number and Term. The number of directors of
the Corporation shall be 10. This number may be changed from
time to time by amendment to these Bylaws to increase or decrease
by 30 percent or less the number of directors last elected by the
stockholders, but only the stockholders may increase or decrease
the number by more than 30 percent. No decrease in number shall
have the effect of shortening the term of any incumbent director.
Each director shall hold office until his death, resignation or
removal or until his successor is elected.
Section 2.3 Nomination of Candidates. No person shall be
eligible for election as a director unless nominated (i) by the
Board of Directors upon recommendation of the Nominating
Committee or otherwise or (ii) by a stockholder entitled to vote
on the election of directors pursuant to the procedures set forth
in this Section 2.3.
Nominations, other than those made by the Board of
Directors, may be made only by a stockholder who is a stockholder
of record of a class of shares entitled to vote for the election
directors at the time of the giving of the notice hereinafter
described in this Section 2.3 and only if written notice of the
stockholder's intent to nominate one or more persons for election
as directors at a meeting of stockholders has been given, either
by personal delivery or by United States certified mail, postage
prepaid, addressed to the Secretary of the Corporation at the
principal office of the Corporation and received (i) on or after
December 1st of the year immediately preceding the year in which
the meeting will be held and before January 1st of the year in
which the meeting will be held, if the meeting is to be an annual
meeting and clause (ii) is not applicable, or (ii) not less than
60 days before an annual meeting, if the date of the applicable
annual meeting, as prescribed in these Bylaws, has been changed
by more than 30 days, or (iii) not later than the close of
business on the tenth day following the day on which notice of a
special meeting of stockholders called for the purpose of
electing directors is first given to stockholders.
Each such stockholder's notice shall set forth the
following: (i) as to the stockholder giving the notice (a) the
name and address of such stockholder as they appear on the
Corporation's stock transfer books, (b) the class and number of
shares of stock of the Corporation beneficially owned by such
stockholder, (c) a representation that such stockholder is a
stockholder of record and intends to appear in person or by proxy
at such meeting to nominate the person or persons specified in
the notice, and (d) a description of all arrangements or
understandings, if any, between such stockholder and each nominee
and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made;
and (ii) as to each person whom the stockholder wishes to
nominate for election as a director (a) the name, age, business
address and, if known, residence address of such person, (b) the
principal occupation or employment of such person, (c) the class
and number of shares of the Corporation which are beneficially
owned by such person, and (d) all other information that is
required to be disclosed about nominees for election as directors
in solicitations of proxies for the election of directors under
the Securities Exchange Act of 1934, as amended, or otherwise by
the rules and regulations of the Securities and Exchange
Commission. In addition, each such notice shall be accompanied
by the written consent of each proposed nominee to serve as a
director if elected. Each such consent shall also contain a
statement from the proposed nominee to the effect that the
information about him contained in the notice is correct.
Section 2.4 Election. Except as provided in Section 2.5
of this Article and in the Articles of Incorporation, the
directors shall be elected by the common stockholders and
preferred stockholders entitled to vote with the common
stockholders at the annual meeting of stockholders, and those
nominees who receive the greatest number of votes shall be deemed
elected even though they do not receive a majority of the votes
cast. No individual shall be named or elected as a director
without his prior consent.
Section 2.5 Removal; Vacancies. The stockholders may
remove one or more directors, with or without cause. If a
director is elected by a voting group, only the stockholders of
that voting group may vote to remove him. Unless the Articles of
Incorporation require a greater vote, a director may be removed
if the number of votes cast to remove him constitutes a majority
of the votes entitled to be cast at an election of directors of
the voting group or voting groups by which such director was
elected. A director may be removed by the stockholders only at a
meeting called for the purpose of removing him and the notice of
the meeting must state that the purpose, or one of the purposes
of the meeting, is removal of the director.
A vacancy on the Board of Directors, including a vacancy
resulting from the removal of a director or an increase in the
number of directors, may be filled by (i) the stockholders, (ii)
the Board of Directors or (iii) the affirmative vote of a
majority of the remaining directors though less than a quorum of
the Board of Directors, and may, in the case of a resignation
that will become effective at a specified later date, be filled
before the vacancy occurs but the new director may not take
office until the vacancy occurs.
Section 2.6 Compensation. The Board of Directors may fix
the compensation of directors for their services and may provide
for the payment of all expenses incurred by directors in
attending regular and special meetings of the Board of Directors.
ARTICLE III - DIRECTORS' MEETINGS
Section 3.1 Annual and Regular Meetings. An annual
meeting of the Board of Directors, which shall be considered a
regular meeting, shall be held immediately following each annual
meeting of stockholders, for the purpose of electing officers and
carrying on such other business as may properly come before the
meeting. The Board of Directors may also adopt a schedule of
additional meetings which shall be considered regular meetings.
Regular meetings shall be held at such times and at such places,
within or without the Commonwealth of Virginia, as the Chairman
or, in his absence, the President, shall designate. If no place
is designated, regular meetings shall be held at the principal
office of the Corporation.
Section 3.2 Special Meetings. Special meetings of the
Board of Directors shall be held on the call of the Chairman, the
President or any three members of the Board of Directors at the
principal office of the Corporation or at such other place as the
Chairman, or in his absence, the President, shall designate.
Section 3.3 Telephone Meetings. The Board of Directors
may permit any or all directors to participate in a regular or
special meeting by, or conduct the meeting through the use of,
any means of communication by which all directors participating
may simultaneously hear each other during the meeting. A
director participating in a meeting by this means is deemed to be
present in person at the meeting.
Section 3.4 Notice of Meetings. No notice need be given
of regular meetings of the Board of Directors.
Notice of special meetings of the Board of Directors shall
be given to each director in person or delivered to his residence
or business address, or such other place as he may have directed
in writing, not less than 24 hours before the meeting by mail,
messenger, telecopy, telegraph, or other means of written
communication or by telephoning such notice to him. Any such
notice shall set forth the time and place of the meeting and
state the purpose for which it is called.
Section 3.5 Quorum; Voting. A majority of the number of
directors fixed in these Bylaws shall constitute a quorum for the
transaction of business at a meeting of the Board of Directors.
If a quorum is present when a vote is taken, the affirmative vote
of a majority of the directors present is the act of the Board of
Directors unless the act of a greater number is required by law,
the Articles of Incorporation or these Bylaws. A director who is
present at a meeting of the Board of Directors when corporate
action is taken is deemed to have assented to the action taken
unless (i) he objects at the beginning of the meeting, or
promptly upon his arrival, to holding it or transacting specified
business at the meeting; or (ii) he votes against, or abstains
from, the action taken.
Section 3.6 Waiver of Notice; Attendance at Meeting. A
director may waive any notice required by law, the Articles of
Incorporation, or these Bylaws before or after the date and time
stated in the notice, and such waiver shall be equivalent to the
giving of such notice. Except as provided in the next paragraph
of this section, the waiver shall be in writing, signed by the
director entitled to the notice and filed with the minutes or
corporate records.
A director's attendance at or participation in a meeting
waives any required notice to him of the meeting unless the
director at the beginning of the meeting or promptly upon his
arrival objects to holding the meeting or transacting business at
the meeting and does not thereafter vote for or assent to action
taken at the meeting.
Section 3.7 Action Without Meeting. Action required or
permitted to be taken at a Board of Directors' meeting may be
taken without a meeting if the action is taken by all members of
the Board. The action shall be evidenced by one or more written
consents describing the action taken, signed by each director
either before or after the action taken, and included in the
minutes or filed with the corporate records reflecting the action
taken. Action taken under this section shall be effective when
the last director signs the consent unless the consent specifies
a different effective date in which event the action taken is
effective as of the date specified therein, provided the consent
states the date of execution by each director.
ARTICLE IV - COMMITTEE OF DIRECTORS
Section 4.1 Committees. The Board of Directors may
create one or more committees and appoint members of the Board of
Directors to serve on them. Unless otherwise provided herein,
each committee shall have two or more members who serve at the
pleasure of the Board of Directors. The creation of a committee
and appointment of members to it shall be approved by the number
of directors required to take action under Section 3.5 of these
Bylaws.
Section 4.2 Authority of Committees. To the extent
specified by the Board of Directors, each committee may exercise
the authority of the Board of Directors, except that a committee
may not (i) approve or recommend to stockholders action that is
required by law to be approved by stockholders; (ii) fill
vacancies on the Board of Directors or any of its committees;
(iii) amend the Articles of Incorporation without stockholder
approval; (iv) adopt, amend, or repeal these Bylaws; (v) approve
a plan of merger not requiring stockholder approval; (vi)
authorize or approve a distribution, except according to a
general formula or method prescribed by the Board of Directors;
or (vii) authorize or approve the issuance, or sale or contract
for sale of stock, or determine the designation and relative
rights, preferences, and limitations of a class or series of
stock, except that the Board of Directors may authorize a
committee, or a senior executive officer of the Corporation, to
do so within limits specifically prescribed by the Board of
Directors.
Section 4.3 Executive Committee. The Board of Directors
shall appoint an Executive Committee consisting of two or more
directors, which committee shall have all of the authority of the
Board of Directors except to the extent such authority is limited
by the provisions of Section 4.2.
Section 4.4 Audit Committee. The Board of Directors
shall appoint an Audit Committee consisting of not less than
three directors, none of whom shall be officers, which committee
shall regularly review the adequacy of the Corporation's internal
financial controls, review with the Corporation's independent
public accountants the annual audit and other financial
statements, and recommend the selection of the Corporation's
independent public accountants.
Section 4.5 Nominating Committee. The Board of Directors
shall appoint a Nominating Committee consisting of not less than
three directors, a majority of whom shall not be officers or
employees, which committee shall recommend to the Board of
Directors the names of persons to be nominated for election as
directors of the Corporation.
Section 4.6 Compensation Committee. The Board of
Directors shall appoint a compensation committee consisting of
not less than three directors, none of whom shall be officers,
which committee shall recommend to the Board of Directors the
compensation of directors and those officers of the Corporation
who are directors, make awards under the Corporation's
discretionary employee benefit plans, and make recommendations
from time to time to the Board of Directors regarding the
Corporation's compensation program.
Section 4.7 Committee Meetings; Miscellaneous. The
provisions of these Bylaws which govern meetings, action without
meetings, notice and waiver of notice, and quorum and voting
requirements of the Board of Directors shall also apply to
committees of directors and their members.
ARTICLE V - OFFICERS
Section 5.1 Officers. The officers of the Corporation
shall be a Chairman, a Chief Executive Officer, a President, a
Secretary, a Chief Financial Officer, and such additional
officers, including Vice Presidents and other officers, as the
Chief Executive Officer or the Board of Directors may deem
necessary or advisable to conduct the business of the
Corporation. The Chairman and the President shall be members of
the Board of Directors and one of them shall be designated as
Chief Executive Officer. The Board of Directors shall also
designate those officers who are deemed to be "Executive
Officers." Any two offices may be combined except the offices of
President and Secretary.
Section 5.2 Election, Term. Executive Officers shall be
elected at each annual meeting of the Board of Directors and
shall hold office, unless removed, until the next annual meeting
of the Board of Directors or until their successors are elected.
All other officers shall be appointed by the Chief Executive
Officer and shall hold office, unless removed, until their
successors are appointed. Any officer may resign at any time
upon written notice to the authority which appointed him.
Section 5.3 Removal of Officers. Officers elected by the
Board of Directors may be removed, with or without cause, at any
time by the Board of Directors. Appointed officers may be
similarly removed by the person having the authority to appoint
them.
Section 5.4 Duties of the Chief Executive Officer. The
Chief Executive Officer shall have general charge of, and be
charged with, the duty of supervision of the business of the
Corporation. In addition, he shall perform such duties, from
time to time, as may be assigned to him by the Board of
Directors.
Section 5.5 Duties of the Chairman. Unless he declines
to serve, the Chairman shall preside at all meetings of the
stockholders and the Board of Directors and perform such duties,
from time to time, as may be assigned to him by the Board of
Directors.
Section 5.6 Duties of the President. The President shall
have such powers and duties as generally pertain to that position
and, in the absence of the Chairman, unless he declines to serve,
he shall preside at all meetings of the stockholders and the
Board of Directors. He shall further perform such duties as may,
from time to time, be assigned to him by the Chief Executive
Officer or the Board of Directors.
Section 5.7 Duties of the Secretary. The Secretary shall
have the duty to see that a record of the proceedings of each
meeting of the stockholders and the Board of Directors, and any
committee of the Board of Directors, is properly recorded and
that notices of all such meetings are duly given in accordance
with the provisions of these Bylaws or as required by law; he may
affix the corporate seal to any document the execution of which
is duly authorized, and when so affixed may attest the same; and,
in general, he shall perform all duties incident to the office of
secretary of a corporation, and such other duties as, from time
to time, may be assigned to him by the Chief Executive Officer or
the Board of Directors, or as may be required by law.
Section 5.8 Duties of the Chief Financial Officer. The
Chief Financial Officer shall have charge of and be responsible
for all securities, funds, receipts and disbursements of the
Corporation, and shall deposit or cause to be deposited, in the
name of the Corporation, all monies or valuable effects in such
banks, trust companies or other depositories as shall, from time
to time, be selected by or under authority granted by the Board
of Directors; he shall be custodian of the financial records of
the Corporation; he shall keep or cause to be kept full and
accurate records of all receipts and disbursements of the
Corporation and shall render to the Chairman, the President and
the Board of Directors, whenever requested, an account of the
financial condition of the Corporation; and shall perform such
duties as may be assigned to him by the Chief Executive Officer
or the Board of Directors.
Section 5.9 Duties of Other Officers. The other officers
of the Corporation shall have such authority and perform such
duties as shall be prescribed by the Board of Directors or by
officers authorized to appoint them to their respective offices.
To the extent that such duties are not so stated, such officers
shall have such authority and perform the duties which generally
pertain to their respective offices, subject to the control of
the Chief Executive Officer or the Board of Directors.
Section 5.10 Voting Securities of Other Corporations. Any
one of the Chairman, the President or the Chief Financial Officer
shall have power to act for and vote on behalf of the Corporation
at all meetings of the stockholders of any corporation in which
this Corporation holds stock, or in connection with any consent
of stockholders in lieu of any such meeting.
Section 5.11 Certain Agents. The Chief Executive Officer
or such other officer as he may authorize may from time to time
engage employees of subsidiaries of the Corporation to be agents
for the Corporation to perform staff or operational functions.
Such persons may act on behalf of the Corporation under such
titles (including designations as divisional officers) as may be
specified from time to time by the Chief Executive Officer, but
no engagement under this section shall constitute such agent an
employee or officer of the Corporation. Such agents shall
perform the duties assigned to them from time to time by the
Chief Executive Officer or by any other officer of the
Corporation authorized to make such assignments. Any such agent
may be removed, with or without cause, at any time by the Chief
Executive Officer. This section shall not limit the authority
any officer or any other employee of the Corporation may
otherwise have respecting the engagement of agents for the
Corporation.
Section 5.12 Bonds. The Board of Directors may require
that any or all officers, employees and agents of the Corporation
give bond to the Corporation, with sufficient sureties,
conditioned upon the faithful performance of the duties of their
respective offices or positions.
ARTICLE VI - CERTIFICATES OF STOCK
Section 6.1 Form. Stock of the Corporation shall, when
fully paid, be evidenced by certificates containing such
information as is required by law and approved by the Board of
Directors. Certificates shall be signed by the President or any
Vice President and the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer and may (but need not) be
sealed with the seal of the Corporation. Any such signature may
be a facsimile, engraved or printed, if the certificate is
countersigned by a transfer agent, or registered by a registrar,
other than the Corporation itself or an employee of the
Corporation. In case any such officer who has signed or whose
facsimile signature has been placed upon any such certificate
shall have ceased to hold office before such certificate is
issued, the certificate shall, nevertheless, be valid.
Section 6.2 Lost, Stolen or Destroyed Stock Certificates.
The Corporation may issue a new stock certificate in the place of
any certificate theretofore issued which is alleged to have been
lost, stolen or destroyed and may require the owner of such
certificate, or his legal representative, to give the Corporation
a bond, sufficient to indemnify it against any claim that may be
made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of any such
new certificate.
Section 6.3 Transfer. The Board of Directors may make
such rules and regulations concerning the issue, registration and
transfer of certificates representing the stock of the
Corporation as it deems necessary or proper and may appoint
transfer agents and registrars. Unless otherwise provided,
transfers of stock and of the certificates representing such
stock shall be made upon the books of the Corporation by
surrender of the certificates for the stock transferred,
accompanied by written assignments given by the owners or their
attorneys-in-fact.
ARTICLE VII - VIRGINIA CONTROL
SHARE ACQUISITION STATUTE
The provisions of Article 14.1 of the Virginia Stock
Corporation Act (13.1-728.1 et seq.) in effect on the 8th day of
February, 1990, shall not apply to the acquisition of shares of
this Corporation.
ARTICLE VIII - MISCELLANEOUS PROVISIONS
Section 8.1 Corporate Seal. The corporate seal of the
Corporation shall be circular and shall have inscribed thereon,
within and around the circumference, "JAMES RIVER CORPORATION OF
VIRGINIA". In the center shall be the word "SEAL".
Section 8.2 Fiscal Year. The fiscal year of the
Corporation shall be determined in the discretion of the Board of
Directors, but in the absence of any such determination it shall
be a fiscal year of either 52 or 53 weeks ending on the last
Sunday in December.
Section 8.3 Amendments. These Bylaws may be amended or
repealed, and new Bylaws may be made, at any regular or special
meeting of the Board of Directors by a majority of the Board.
Bylaws made by the Board of Directors may be repealed or changed
and new Bylaws may be made by the stockholders, and the
stockholders may prescribe that any Bylaw made by them shall not
be altered, amended or repealed by the Board of Directors.
Exhibit 11
JAMES RIVER CORPORATION of Virginia
COMPUTATION OF EARNINGS PER SHARE
For the Quarters (13 Weeks) and Nine Months (39 Weeks) Ended
September 24, 1995 and September 25, 1994
(in thousands, except per share amounts)
Third Quarter Nine Months
PRIMARY: 1995 1994 1995 1994
Net earnings (loss)
applicable to common shares $21,651 $(14,541) $56,271 $(25,130)
Weighted average number of
common shares and common share
equivalents:
Common shares outstanding 83,358 81,686 82,394 81,663
Issuable upon exercise of
outstanding stock options
and pursuant to a deferred
stock award plan 3,746 4,111
Less assumed acquisition of
common shares, using proceeds
from stock options and the
impact of a deferred
stock award plan, under
the treasury stock method (2,316) (2,990)
84,788 81,686 83,515 81,663
Primary earnings (loss) per
common share $.25 $(.18) $.67 $(.31)
Exhibit 11 (continued)
JAMES RIVER CORPORATION of Virginia
COMPUTATION OF EARNINGS PER SHARE
For the Quarters (13 Weeks) and Nine Months (39 Weeks) Ended
September 24, 1995 and September 25, 1994
(in thousands, except per share amounts)
Third Quarter Nine Months
FULLY DILUTED: 1995 1994 1995 1994
Net earnings (loss) applicable
common shares $21,651 $(14,541) $56,271 $(25,130)
Weighted average number of
common shares and common share
equivalents:
Common shares outstanding 83,358 81,686 82,394 81,663
Issuable upon exercise of
outstanding stock options
and pursuant to a deferred
stock award plan 3,748 4,996
Less assumed acquisition of
common shares, using proceeds
from stock options and the
impact of a deferred stock
award plan, under the treasury
stock method (2,282) (3,219)
84,824 81,686 84,171 81,663
Fully diluted earnings (loss)
per common share $.25 $(.18) $.67 $(.31)
Exhibit 11 (continued)
JAMES RIVER CORPORATION of Virginia
NOTES TO COMPUTATIONS OF EARNINGS
PER SHARE
Primary earnings per common share is computed by dividing net
income, after deducting dividends on outstanding preferred shares, by
the weighted average number of common shares and dilutive common
share equivalents outstanding during the period. Common share
equivalents consist of shares issuable pursuant to stock options and
a deferred stock award plan, and are calculated using an average
market price for the period.
Fully diluted earnings per common share is computed using the
same method as for the primary computation except that (i) common
share equivalents are computed using the higher of the market price
at the end of the period or the average market price for the period,
and (ii) the average number of common shares and dilutive common
share equivalents outstanding is increased by the assumed conversion,
if dilutive, of the Company's Series K $3.375 Cumulative Convertible
Exchangeable Preferred Stock, its Series L $14.00 Cumulative
Convertible Exchangeable Preferred Stock, its Series N $14.00
Cumulative Convertible Exchangeable Preferred Stock, and its Series P
9% Cumulative Convertible Preferred Stock. No conversions of any of
the convertible preferred stocks have been assumed for the periods
presented, as such conversions are not dilutive.
Exhibit 12
<TABLE>
JAMES RIVER CORPORATION of Virginia
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (a)
(Dollar amounts in thousands)
<CAPTION>
Fiscal Year Ended
April December December December December December
29, 1990 30, 1990 29, 1991 27, 1992 26, 1993 25, 1994
(52 weeks) (35 weeks) (52 weeks)(52 weeks) (52 weeks) (52 weeks)
(b) (c,d) (d)
<S> <C> <C> <C> <C> <C> <C>
Pretax income (loss) from
continuing operations,
before minority interests $371,501 $44,352 $115,170 $(182,817) $14,115 $(15,693)
Add:
Interest charged to
operations 198,743 133,716 191,344 192,962 183,035 210,063
Portion of rental expense
representative of interest
factor (assumed to be one-
third) 23,400 15,100 19,891 19,426 19,094 24,224
Total earnings, as
adjusted $593,644 $193,168 $326,405 $29,571 $216,244 $218,594
Fixed charges:
Interest charged to
operations $198,743 $133,716 $191,344 $192,962 $183,035 $210,063
Capitalized interest 25,475 10,759 31,740 12,778 5,291 3,080
Portion of rental expense
representative of interest
factor (assumed to be one-
third) 23,400 15,100 19,891 19,426 19,094 24,224
Total fixed charges $247,618 $159,575 $242,975 $225,166 $207,420 $237,367
Ratio 2.40 1.21 1.34 -- 1.04 --
See accompanying footnote explanations.
</TABLE>
Exhibit 12 (continued)
JAMES RIVER CORPORATION of Virginia
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (a)
(Dollar amounts in thousands)
Nine Months Ended
September September
24, 25,
1995 1994
(39 Weeks) (39 Weeks)
Pretax income from continuing
operations, before minority interests $182,444 $9,116
Add:
Interest charged to operations 183,915 146,600
Portion of rental expense representative of
interest factor (assumed to be one-third) 18,168 14,320
Total earnings, as adjusted $384,527 $170,036
Fixed charges:
Interest charged to operations $183,915 $146,600
Capitalized interest 5,006 2,114
Portion of rental expense representative of
interest factor (assumed to be one-third) 18,168 14,320
Total fixed charges $207,089 $163,034
Ratio 1.86 1.04
See accompanying footnote explanations.
Exhibit 12 (continued)
JAMES RIVER CORPORATION of Virginia
NOTES TO COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(a) In computing the ratio of earnings to fixed charges,
earnings consist of income before income taxes,
minority interests, and fixed charges excluding
capitalized interest. Fixed charges consist of
interest expense, capitalized interest, and that
portion of rental expense (one-third) deemed
representative of the interest factor. Earnings and
fixed charges also include the Company's proportionate
share of such amounts for unconsolidated affiliates
which are owned 50% or more and distributed income from
less than 50% owned affiliates.
(b) During 1990, the Company changed its fiscal year from
one ending on the last Sunday in April to one ending on
the last Sunday in December. During this period, the
Company initiated an operational restructuring program
designed to focus the Company's operations on those
businesses in which it commands a substantial market
share and which are less cyclical. In connection with
that program, the Company recorded a $200 million
pretax charge which has been included in the
calculation of the ratio of earnings to fixed charges
for this period.
(c) During 1992, the Company initiated a productivity
enhancement program and recorded a $112 million pretax
charge which has been included in the calculation of
the ratio of earnings to fixed charges for this year.
(d) For the following periods, earnings were inadequate to
cover fixed charges, and the amounts of the
deficiencies were: year ended December 27, 1992 --
$195.6 million and year ended December 25, 1994 --
$18.8 million.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from James River
Corporation of Virginia's September 24, 1995 Form 10-Q financial statements and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000053117
<NAME> JAMES RIVER CORPORATION OF VIRGINIA
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-24-1995
<CASH> 43,667
<SECURITIES> 0
<RECEIVABLES> 906,674
<ALLOWANCES> 0
<INVENTORY> 806,124
<CURRENT-ASSETS> 1,898,462
<PP&E> 6,054,862
<DEPRECIATION> 2,048,203
<TOTAL-ASSETS> 7,203,903
<CURRENT-LIABILITIES> 1,130,505
<BONDS> 2,456,612
<COMMON> 8,455
0
740,264
<OTHER-SE> 1,478,519
<TOTAL-LIABILITY-AND-EQUITY> 7,203,903
<SALES> 5,199,541
<TOTAL-REVENUES> 5,199,541
<CGS> 4,036,392
<TOTAL-COSTS> 4,036,392
<OTHER-EXPENSES> 31,684
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 176,560
<INCOME-PRETAX> 193,113
<INCOME-TAX> 91,364
<INCOME-CONTINUING> 100,199
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100,199
<EPS-PRIMARY> 0.67
<EPS-DILUTED> 0.67
</TABLE>
